USG reports wallboard prices on demand plunge

Tom Stundza -- Purchasing, 11/20/2009 9:30:02 AM There's little chance of a pickup in purchasing of gypsum wallboard until the residential construction market crawls out of its four-year down cycle. At least that's the word from James Metcalf, president of USG Corp., North America's largest wallboard producer.

In a recent conference call with Wall Street analysts, he commented that wallboard demand and shipments are down about 60% from the market peak in 2006, and prices are off about 40%. He says U.S. wallboard use is expected to reach 18 billion square feet this year, or half what it was in 2005.

In the last two years, the company shut about 3.1 billion ft of wallboard capacity, Metcalf says. About 1.8 billion is idled temporarily while 1.5 billion is permanent.

Metcalf says "the near-term outlook remains challenging," and acknowledges that a third quarter wallboard price increase had been rescinded. USG's average realized price in the third quarter was $115.33 per thousand square feet, down from $120.79 in the second quarter and steady with $114.42 in third quarter of 2008.