Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for June 7, 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: An up and down futures market, additional sales to China and firmer quotes extended by western SPF producers carrying very little order file had buyers confused. Despite a few firmer prices, traders were skeptical of any strength in the market. No turnaround was yet evident in the Southern Pine lumber market. With the exception of flat 2x6 pricing, other dimensions continued their slide. Secondaries reported that inventories at some of their customers’ yards remained abundant. Wholesalers experienced spotty trading activity. Coastal species lumber producers sold greater volumes, but not enough to keep prices from falling. Production curtailments announced the week prior had some impact on the market, but to what degree was difficult to ascertain. The sense of stability in the Inland species lumber market that began to develop last week carried over into this week, with the result that prices have begun to show firmness, and buyers are floating more inquiries past mills. Radiata Pine Mldg&Btr, which has been pushed hard this spring, does show a modest retrenchment in the price of 5/4. Both 5/4 and 6/4 Ponderosa Pine Mldg&Btr thus remain firm in their prices. Even Ponderosa Pine #2 Shop, which has been lagging for many months, shows some renewal and a push upward in price. Ponderosa Pine 1x10 in all grades is either stable or slightly firmer among most producers. The grade having the greatest downward pressure seems to be #2. Eastern White Pine sources report sluggish sales. Most Western Red Cedar mills showed no inclination to raise prices in the lackluster market. In fact, some buyers noted a bit of softness in a few items.

Panels: The OSB market suffered from regional overproduction, coupled with extreme buyer caution. The result was a falling but inconsistent pricing profile, depending on the region. The news of mill closures this week did not have a strong immediate impact. Southern Pine plywood producers sold greater volumes than in previous weeks, but it took lower prices to entice buyers. Where discounts were deepest, wholesalers purchased greater speculative volumes than in past weeks. Truck availability tightened, generating late shipments. Moderate sales and slim order files kept downward pressure on Western Fir plywood prices. Unprofitability is prompting some producers to cut back production. Wholesalers reported sluggish trading. Price adjustments in the Canadian plywood market were downward, and few sources reported any strong conviction that the market was ready to stabilize. Demand for particleboard varied. After experiencing a brief slowdown in sales around the Memorial Day weekend, some particleboard producers saw a return of sales volumes experienced prior to that time. MDF demand was steady, remaining strong.

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