After rising to a new 1993 high earlier this month, the Journal of Commerce Industrial Price Index was down slightly for the week.
The inflation-tracking index was off 0.3 point Friday compared with the previous weekend level. Among the 18 industrial materials watched for their sensitivity to inflationary expectations, plywood and nonferrous metals have been followed most closely because of their leading indicators of economic activity.Plywood was $450 a 1,000 board feet, holding unchanged from a week ago but nearly double the price last fall.
However, the tone of the market was not nearly as strong as it was as late as two weeks ago, dealers said. Wholesale lumber dealers last week continued to undercut mill prices, which breached the $400 level earlier this month, indicating that mills are meeting some resistance to the unprecedented price levels. Still, mill asking prices were steady last week, trade sources said.
Mills continued to deal from a position of strength, not bowing to lower wholesale prices, the dealers said. But after a quiet week of sales, lumber buyers said mill prices could falter next week.
Adverse weather across the United States reduced construction demand, and secondary inventories were expected to be sufficient to meet that demand for two to three weeks, according to reports from Knight-Ridder Financial News
However, some lumber buyers said movement at mill and wholesale levels, while slower than in recent weeks, continued at a normal rate this week. If that is the case, wholesaler buying could increase on a need basis next week, they said.
Metal prices on average, too, fell slightly for the week although the markets for scrap copper and aluminum still enjoyed the residual effects of stronger prices for tin, lead and zinc. These nonferrous metals have risen in recent weeks on stronger demand created by news of their increased demand and tightening supplies.