RISI Crow’s Market Recap for July 20

A price index of lumber and panels used in actual construction for July 20, 2018.

Western: regional species perimeter foundation
Southern: regional species slab construction

Crow's Market Recap: A condensed recap of the market conditions for the major North American softwood lumber and panel products as reported in Crow's Weekly Market Report.


Lumber

SPF buyers purchased sparingly, maintaining a cautious approach as prices continued to decline. Prices still at historically high levels, a futures board trending yet lower and a US housing construction report well below expectations all contributed to buyers’ unease.

• Southern Pine lumber producers continued to struggle selling production, forcing them to discount for another week. Buyers remained bearish and producers somewhat surprised prices have yet to stabilize after six weeks of downward moves.


• Coastal species pricing remained vulnerable. Several producers reported receiving fewer inquiries while buyers admitted they tried to stay out of the market as much as possible. As in other species, 2x6 exhibited considerable weakness.


• Inland lumber producers reported a wide range of sales activity. One point of common agreement was the adverse effect of Canadian lumber on 2x6 #2&Btr and, to a lesser extent, 2x4.


• Few stud prices managed to hold onto levels established the prior week, as weakness infused the market. Some producers approached the market much more aggressively than others, prompting buyers to announce that prices covered broad ranges.


• Neither Ponderosa Pine Mldg&Btr nor Shop showed any notable change in the pace of the market or the prices being achieved by mills. Moulding producers still had a leery eye on the US/China trade war, but nothing palpable has emerged to redefine the market. Ponderosa Pine Selects and Commons showed some flexibility in prices this week. Selects were stable, as they have been for most of the year. Commons were governed by demand in 1x6 #2. Overall, however, it was an active week.


• Several Western Red Cedar producers reported a pickup in business after experiencing a few weeks of slower sales activity. The purchases consisted of replenishment volumes of a variety of items. Persistent demand for other items such as timbers kept overall supplies tight.

Panels

OSB markets tried to find a bottom again this week but continued falling apart, with numbers all over the map and buying activity hushed. Inventories ran further down, but sources, seeing lead times closer in, said participation was minimal.

• Sales activity in the Southern Pine plywood market remained dull, although some producers reported a modest improvement. Demand again lagged supplies, leading to discounts across a broad range of items. Buyers wary of downside price risk approached the market cautiously, carrying very limited plywood inventory in some instances.


• Pricing in the Western Fir plywood market continued its downward trajectory. Lackluster sales activity forced producers to seek orders by way of discounts and through negotiated deals. Most CDX prices dropped by single digits.


• Canadian plywood markets slowed this week, as participants shied away from declining prices. Next week’s construction holiday in Quebec further dampened activity. Price opinions were all over the board, anywhere from net to ten points down.


• While some particleboard producers reported steady sales, others noted a slightly slower pace. Order files at mills remained at a comfortable distance, however, as most customers continued to purchase with some regularity.


• MDF sales remained robust, prompting a major producer to report, “We’ve had a strong July.” Recent price increases were introduced to customers with little pushback from customers.

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