RISI Crow’s Market Recap for June 15

A price index of lumber and panels used in actual construction for June 15, 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 trading was quiet, forcing prices sharply lower. Buyers sensed the potential for significant downside risk and approached the market cautiously. A futures board showing four straight days of down-limit moves through Wednesday reinforced buyers’ apprehension.

• Southern Pine prices continued to weaken, prompting buyers to purchase sparingly. Buyers filled in inventories only where necessary, one producer calling them “grocery store orders.” Weakness was generally more pronounced in 2x4.


• Discounts deepened and grew more plentiful in the Coastal species market. Traders frequently pointed to several days of sharp declines in futures for the lack of sales activity. Aggressive wholesalers and spotty deep discounting by producers forced others to lower quotes.


• The Inland market became less consistent this week, as price softening in other regions increased and put pressure on the Inland region. Price declines were more evident among Inland mills than in previous weeks.


• Stud prices were flat to down across almost all items as the market grew quieter. Producers opened to deeper price cuts in 9’ and most commonly in 2x4, generating a wide array of sales levels. Lumber futures losses for most of the week received much of the credit for the quieter tone.


• The lack of strong market fluctuations in Ponderosa Pine Mldg&Btr and Shop should not be interpreted as a slack market. Activity levels were reported adequate to keep market prices stable and solid. Major producers have largely turned their production schedules away from Ponderosa to dimension lumber. Ponderosa Pine Selects stayed very stable. Ponderosa Commons showed a few price changes, but a noticeable change in #2 Common, with increased inquiries and small upticks in a few prices.


• Market share was of some concern to Western Red Cedar traders. Prices of some items are prompting buyers to switch to alternative products, even though competing prices have also risen over the past year.

Panels

Some deeper cracks formed in the OSB market as buyers were spooked by high prices which came down in most regions. Western Canada and the southern U.S. regions appeared most vulnerable.

• Southern Pine plywood producers experienced the slowest week of sales in many. Order files most often remained in the same weeks that were established the week prior. Some of those lead times extended into the week of July 2, prompting those producers to hold quotes firmly. Others discounted.


• Sales slowed further in the Western Fir plywood market, leveling prices after several weeks of modest to moderate increases. Buyers in the East purchased units out of reloads and highly mixed carloads.


• Canadian plywood markets remained in a digestive mode this week. While things were quiet on the mill side, distribution reported brisk warehouse activity. Among all contacts, there is a sense that any influence out of the ordinary could generate a fresh wave of excitement.


• Particleboard producers were often content with the amount of orders they received. More reported a moderately better pace than in previous weeks.


• MDF sales were most often described as “good” to “brisk.” Prices from some producers continued to be raised in response to both demand and higher production costs. In a few instances, MDF order files extended beyond what producers were comfortable with.

For more on RISI, click here.