Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Nov. 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: Trading was sluggish in the SPF lumber market, with one producer describing overall sales as a “week of Mondays.” Secondaries continued to sell off positions in a market showing little urgency on the demand side. Mills in the West held onto prices more forcefully than those mills in the East. Southern Pine lumber prices had less lift than in previous weeks. While eroding order files placed more pressure on mills to sell some lengths at discounts, mills generally were pleased with their overall inventory positions and market pricing. Prices in the Coastal species market showed less upward push than in prior weeks. High prices and the upcoming holiday typically received most of the blame for the lackluster activity. Although sales volumes were light, demand was steady for Inland species lumber. The moderate sales volumes were more from a lack of offerings than a lack of interest. Buyers continued to search for a tally that fit and comfortable ship times. Radiata Pine offerings of Shop grades were light and sold quickly when available. The market remained strong for Ponderosa Pine #2&Btr Shop. Driven by demand from window manufactures, prices for 5/4 #1 and #2 Shop increased. A number of Ponderosa Pine board producers were off the market or were not quoting until the wood came out of the mill. Demand continued to outpace supply, which left buyers scrambling to find coverage. Eastern White Pine producers reported mill order files into late December. ESLP producers reported steady sales of both #2&Btr and #3, particularly for the narrow widths. Buyers purchased relatively minor, seasonal volumes of Western Red Cedar for this year. Customers and suppliers continued to finalize business for the first quarter of 2014.

Panels: Market activity for OSB was on the quiet side. As the holiday week approached, mills were content to hold prices on any items with an order file. That is not to say there were not some deals made, just that they were not reflected in mill asking prices. Moderate demand for Southern Pine plywood prompted mills to nudge prices higher as they sold more volumes into the week of Dec. 9. Wholesalers made offers to mills and purchased sparingly while continuing to sell off their positions and contract volumes at a steady rate. Demand for Western Fir plywood was not strong enough to move most mill order files beyond the week of Dec. 2, the same one many producers began the week in. Even quicker shipping volumes available during the Thanksgiving holiday week forced discounts into the market. The Canadian plywood market remained firm in spite of a quiet sales pace. Producers reported order files from mid-December out to the first week of January. Yards carrying particleboard and MDF continued the process of fine-tuning those inventories for the end of the year. Prices held up, although some discounting was evident.

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