Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Dec. 7, 2012

*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: Upward market momentum influenced prices early in SPF lumber. Already sold out for much of December, mills increased prices and continued to fill in the month. Order files for some items, certainly 2x6 #2&Btr, stretched into early January. Despite lackluster sales, Southern Pine lumber producers were in no hurry to lower prices. Likewise, buyers were in no rush to pay current prices. This left what several traders described as a "standoff." Sales activity remained strong in the Coastal species lumber market, driving prices higher. Order files out two to three weeks at some mills are keeping dry availability constricted. Spotty discounts of green Doug Fir appeared. The Inland species lumber market remained strong, in spite of slower sales volumes. Buyers looked to alternate sources for coverage, as mill order files moved into or past the upcoming holiday week. Market activity for Radiata Pine improved, as buyers began to look at covering first quarter needs. Sales activity for Ponderosa Pine Mldg&Btr was light, as buyers made selective purchases for immediate needs. In spite of the slow sales pace, prices were firm. The overall market for Ponderosa Pine boards was unchanged, with only a few prices adjusting down while a couple improved. Eastern White Pine producers reported a firm market. Light inventories at mills kept the Idaho White Pine market on firm ground. Although a few producers reported a slightly slower pace to the Western Red Cedar market, sales overall were still solid and mills continued to fill in the first quarter of next year with orders.

Panels: The tone of OSB markets was one of quiet firmness. Shipment time rather than price was often the determining factor in whether a buyer issued a purchase order or not. Buyers were uncomfortable with extended lead times. After a sluggish beginning, Southern Pine plywood sales increased significantly on Wednesday. Producers discounted some items to attract sales, and buyers reacted by purchasing enough volume to push mill order files well into the latter half of December. Western Fir plywood producers experienced a good week of sales, limiting availability of product for the remainder of the year. Distributors purchased steady replacement volumes, experiencing cooperative weather throughout much of the U.S. Canadian plywood buyers seeking quicker shipment times than those offered by producers turned to distributers to cover their immediate needs. Not everyone is in agreement on the strength of the market. Particleboard and MDF producers reported a good week of sales. A few noted they had their best sales week in particleboard in months, while others sold more than they have in several weeks.

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