Market Report

Market Update

UPDATED 8/16/2017

THE INVENTION

The toilet seat was invented by a Norwegian in Minnesota… Twenty years later a North Dakotan improved it by putting a hole in the middle.

“You will never know the joy, power, or satisfaction of holding your price and winning a sale until you’ve held your price and lost one.” – Rick Davis

The Market Update, in existence since 2012, is published on a weekly basis and is intended to be a source of lumber and commodities information for the present & future and pricing trend information. We appreciate receiving some of this information from Do It Best Corporation and from Random Lengths.

Builders values the opportunity to serve its customers in Colorado & Nebraska and provide you with Lumber & Panel price guidelines as well as Commodities information.

THE BOTTOM LINE:

Builders price motion this week:

Lumber: 

We continue to be in uncharted waters with no clear direction of exactly where the market is headed. A few more increases on the fir side, while SPF is now on a downward trend. Be cautious of any and all quotes that have expired. Update your customers often as well as any unaccepted quotes.

Panels:

Order files continue to grow as the market is under produced. We remain at 4 year highs, and the end is not yet in sight. It will come off, just not sure when.

Be cautious of any quotes that have not been accepted yet and make sure our customers are aware of the moving market.

Price Change From Prior Week   –  8/11/17 vs 8/4/17
OSB:

OSB remains a seller’s market, as order files continue to extend and inventory levels remain thin.

This trend will likely continue at least for a few more weeks.
Two Southwest mills are down right now. One is a planned outage and is scheduled to resume production next month. The other Southwest mill is down for an unplanned outage, with no answer as to when that mill should start back up.

The North Central zone, which has struggled with capacity all year, is crimped even further by a 2-week outage at a major mill in Michigan.

Southern Pine Plywood:

Mills reported slow sales and had to rely on current order files. A few took counters to move off floor stock, which was starting to build. Most buying is only fill ins and there seems to be no real sense of urgency to build inventories. It looks like we may see things start to unfold if the pace doesn’t increase.

Western Plywood:

Western Plywood had a more subdued week this week compared to last. Inquiries have been good, but sales have been a bit off with the exception of a strong Monday. CCX order files remain out to the end of the month, with CDX order files the week of 8/21 or beyond. With so much business in CCX going north of the border, items like 15/32 CDX are off. The perception that the buyers need to come to market is a cloud hanging over many mills. Numbers on 1⁄2 CDX 4-PLY are the ones that get pushed around, but numbers are being kept close to the vest. Look for 1⁄2 CDX 4-PLY to stay steady with other thicknesses not showing much if any weakness.

Western SPF:

Sales of Western Spruce were subdued this week as caution took the place of need. Mills are content to sit back with their order files; however, a few offered out prompt shipments at slight discounts. Reloads and wholesale sales have continued to be strong as they are the best route for fill-in needs.

Expect prices to be flat next week.

The suggestion that the US will enjoy CVD-free trading next week has been challenged this week. Several industry people have reported speaking directly to the ITC who have indicated that there will not be a non-collection of duty window.

The next key date in the trade dispute will be September 6 when Commerce will issue its final duty determination.

As of Thursday afternoon, 126 fires were currently burning in BC, burning over 1.3 million acres of forest land so far this season. The fire danger rating is still high to extreme for the entire province.

Eastern SPF:

The Eastern market remained slow this week. Mills began discounting prices only a few dollars or slightly more if they had prompt loadings. Wholesalers discounted prices deeper than mill levels to get orders, but buyers were still reluctant and only bought what they needed. Prices of 2×4 studs fell the most with 9′ and 10′ leading the way down $8-$10. Lead-times range from 2 weeks to prompt shipping. There is a fair amount of uncertainty in the market due to rumors about the CVD and available production keeping willing purchasers away for now.

Southern Pine – All Zones:

Weak sales and over production are putting downward pressure on the SYP market. We have seen some discounting as the week progressed, especially on 2×4 and 2×12. 2×6 and 2×10 are still holding firm for now. We have seen limited interest as buyers seem content to wait to only buy as needed. Trucking is still a major problem and may delay shipments 1-2 weeks.

Dry Dimension:

Mills order files linger at 8/28 and thin offerings. Doug Fir (DF-L) production is still very thin with some mills into September in the Inland Empire. Trading this week was steady. The market was flat, and opportunities for values arose and the take away was good. White Fir is tough and prices continue to take baby steps upward.

Dry Studs are still well into 8/28 the numbers still higher. We are not ready to call an end to higher prices. Don’t forget that for nearly all lumberyards the second best month of the year is October. We strongly suggest that you keep 45 days of inventory in your yard.

Green Dimension:

Green Doug Fir sales this week were a little slower than last. Inquiry was still steady, but not as many orders were being placed. Buyers seemed to be taking a breather to assess the market. The mills’ lengthy order files kept prices steady and firm across all widths as many mills’ production files are into late August. Prices at the mill for 2×4/2×6 began the week at $485/$490 and ended at $485/$490. Green Doug Fir 2×4 8′ stud sales remained good, but also slowed some this week. Prices at the mill started the week at $465 and finished at $465. Outlook is for prices to trade narrowly in the short term and suggested coverage is 3-4 weeks.

LBM members continue to experience generally prompt delivery service through the Do it Best reload channel.
Moderate delays on mill-routed shipments originating in the South and Southeast persist, but we expect some relief
to materialize in September as seasonal shipment volume decelerates. Moderate delays are expected to continue
in the Pacific Northwest over the near term.

Railcar volume across industries increased 1.9% this week compared to the same week a year ago, and year-to-date volume is now 5.3% higher versus a year ago (source: Association of American Railroads). The CSXT is experiencing slower transit times as reorganization efforts continue; as a result, CSXT-served customers should expect moderate delays over at least the near term. Diesel fuel prices increased again this week, rising $0.050 to a national average retail price of $2.581 per gallon (source: U.S. EIA). Strong demand for truck service will continue to pressure truck freight rates at least moderately higher. We reiterate our caution that freight rates in some distressed areas may exhibit dramatic increases over the next few weeks.

Roofing

Keep an eye on your inventories. Lead times at plants can jump out 2 weeks in a day due to an influx of orders at one time. Check with your account executive and be aware of these issues that might arise.

Summer Sizzler Specials

If you placed “spec to follow” insulation orders on the Summer Sizzler Specials, please make sure to give your account executive the firm specs by the deadline on August 18. This allows the vendor to ship these out prior to the scheduled increases listed below.

Price increases – Insulation:
Summer Sizzler Orders

If you placed “spec to follow” drywall orders on the Summer Sizzler Specials, please send your specs in early enough to get them shipped prior to the August 31 deadline.

Price increases – Steel:
Price increases – Doors:
Extended Jeld-Wen windows lead times:

Effective immediately: due to increased demand at the plant in Grinnell, IA, lead times temporarily will be extended an additional week on all orders. Due to increased demand in the Stayton, OR, plant, orders will be produced within the 3 week timeframe and shipped next truck based on delivery schedule. Also, the Jeld-Wen EverTone painted vinyl windows will be temporarily revising lead times to 4 weeks.

Extended Silver Line Windows lead times:

Due to sales growth in the southern states the Lithia Springs, GA, plant has extended lead times to 6 to 7 weeks. All other plants are currently running 3 to 4 weeks.

New Items:

A vendor change in our hardware section shows several hundred SKU’s with new item numbers. We have switched from Hillman to National. Same product, just a new sku #. Still working out a few bugs, but overall, it should be a seamless transition.