Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Feb. 22, 2013

*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: Sluggish sales activity in the SPF lumber market eroded mill order files and forced secondaries to look for sales $20 or more below mill quotes. A significant downturn in the futures market garnered much of the blame for the lack of sales activity in the cash market. Buyers took a wait-and-see approach to the Southern Pine lumber market while mills pressed prices higher. Diminished sales activity forced producers to lean on order files more and even generated a bit of floor stock at some mills. Although Coastal species lumber producers reported a quieter market, they still sold good volumes often equating to at least a week's worth of production. Low-grade prices were once again stellar, jumping by double digits in a few instances. Inland lumber sales activity was slowed by the Presidents' Day holiday on Monday, a weakening lumber futures market, snow storms and bad weather in the middle half of the nation. Buyers looking for open market Radiata Pine found few offerings available, and what was available was at higher levels. Although Ponderosa Pine Moulding and Shop producers reported a continuation of better sales activity, buyers were hesitant to pay much more for the products. A lack of availability, along with a slight increase in demand, helped propel Ponderosa Pine board prices higher. Mills reported steady sales of ESLP in most widths. Activity for Eastern White Pine remained steady for Standard and Industrial grades. Selects remained slow. A lack of fiber in the Western Red Cedar market forced secondaries to seek coverage from alternative producers. Unfortunately, for buyers scouring the market, any extra volume at mills was extremely scarce.

Panels: The OSB market took on a quieter tone as many buyers went to the sidelines to wait for a more definitive direction in the market. Dealers needing to buy often turned to secondaries for quicker shipment. While wholesalers sold volumes that will ship the last week of February and early March, Southern Pine plywood mills experienced less sales activity. Mill order files usually stretched into the weeks of March 11 and 18. Western Fir plywood producers were disappointed that a strong OSB market and high Southern Pine plywood prices did not influence their market more. Western buyers purchased significant truckload volumes at mill asking levels. After a few strong weeks of sales at eastern particleboard plants and some testing of higher quotes, a couple of particleboard producers have decided to increase prices in early March. In MDF, mills continued to carry strong order files in response to steady demand.

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