Do it Best brought nearly a dozen of its top product specialists to the stage Feb. 7 at the co-op’s Spring Market in Indianapolis to assess recent trends and predict whether prices in their category will go up or down over the next few months. Here’s a summary.
Solid-Sawn Lumber—LBM sales manager Howard O’Neal said higher prices and increased use of Southern yellow pine (SYP) are both in the cards for this year. Reduced output at Western Canadian mills “could be a catalyst for rapid price appreciation,” O’Neal said at the group’s LBM Industry Update luncheon. Meanwhile, SYP output increased by 1 billion board feet last year. “We expect (use of) it to continue to migrate into markets that were exclusively Canadian SPF markets,” he said. And at the same time, European imports are growing and expanding. In the past, you might see European spruce shipped short distances into the interior U.S. from ports like Baltimore and Houston. But recently, a load was trucked from Baltimore all the way to Illinois. Futures prices point to a continuing hike in prices, so that “We could see (prices around) $425 to $430 by the end of the first quarter,” O’Neal believes. That view was echoed by Mike Jones, Do it Best’s product sales manager for Western species. Prices “probably will move in the last two weeks of February,” he said, then slip a bit early in the second quarter before rising again.
OSB and Plywood—Panel production in North America is off 7%, product specialist Brad Seelig said. Given those reductions in capacity, prices have risen lately, and “I don’t see any indications that it won’t continue,” Seelig said. He recommends dealers hold a 60-day supply if they are served by truck and a 90-day supply if they get served by rail.
Drywall—The industry increased gypsum prices about $10 to $15 per thousand on Jan 6, but “I’m already starting to see pricing drift back,” said Mike Jones, sales manager for drywall. Prices are about where they were in 2017, but changes are likely now that St. Gobain has completed its takeover of Continental Building Products.
Roofing—Pricing has been relatively flat, in part because a relative lack of roof-damaging weather has left some members carrying over inventory, and winter buyers weren’t as strong as past years.
Insulation—Output is keeping pace with demand, so pricing has held steady, but what has changed is a tightening of manufacturers’ minimum requirements to send a truck directly to the dealer, sales manager Dusty Weinzierl said.
Windows and Doors—Keep an eye on windows manufacturers’ varied delivery commitments, sales manager Randy Betton advised. He noted that one big window manufacturer promises windows in nine weeks while another offers a two-week lead time. As for doors, Betton noted the co-op has been shipping more commercial doors to an increasing number of members.
Cabinetry—Average box prices will drop a bit, in part because of an expected dip in property flipping, merchandise manager Mike Post predicted. He also expects some impact from November’s announcement that ACPI, which owns Master WoodCraft Cabinetry as well as the Advanta, Echelon, and Serenade brands, is buying the cabinetry division of Masco. That means ACPI will take over the KraftMaid, Merillat, QualityCabinets, and Cardell Cabinetry brands.
Flooring—Expect moderate growth for this category, Post said. Rigid core waterproof flooring “is a star.” Meanwhile, the decline in carpets’ share of the overall market appears to have bottomed out at around 50%.