Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for June 13, 2014

*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 lumber producers in the West and East again came off quotes to sell volumes. Sales improved moderately on Thursday, influenced by the first gain in futures for the week. Chart watchers tried to purchase western 2x4 #2&Btr close to the $300 mark. The degree of uncertainty among Southern Pine lumber buyers and sellers increased as flat prices seemed to waver and more volumes opened to discounts. Buyers perceived some items beginning to buildup at mills, but producers exhibited little urgency to move off any volumes with deep discounts. Weak pricing continued to exist throughout the Coastal species lumber market. Downward price momentum kept buyers from purchasing whenever they could hold off. Narrow widths in dry Hem-Fir took a beating, as mills felt more pressure to compete with SPF volumes and prices. Inland lumber producers spent the week putting a bottom on the lumber market. Prices have begun to show firmness, and buyers are floating more inquiries past mills. Radiata Pine industrials are in good balance, as they have been for some time, and the supply is relatively tight. The lower grades of Ponderosa Pine, #3 Shop and P99, do show some available stock among sellers. Ponderosa Pine board producers continue to report that #2&Btr Common is still the slowest of the three Common grades. Weakest of the #2 items is 1x8, followed by 1x6 and 1x4. Retailers must renew buying activity in order for it to change. Both #3 and #4 Common are reported to be moving at a good pace. Eastern White Pine seems to be following the sun to more improvement. Buyers of Western Red Cedar continued to purchase strong volumes. This continued to place pressure on mills to produce the volumes needed to keep up with orders.

Panels: OSB markets seem to be finding a bottom, and trading was done within a tight range. Mills stuck close to their numbers. A little spike in activity was reported late week, as OSB tried to follow a surge in plywood. Although some traders sensed the potential for an increase in Southern Pine plywood sales, producers lowered rated sheathing prices early in an effort to keep volumes flowing. Trading increased abruptly Wednesday, prices reached a bottom and producers began to raise prices. Western Fir plywood mills experienced solid demand after activity had picked up the week prior. As a result, producers increased quotes and sold sheathing at the higher price levels. Downward pressure in the Canadian plywood market was felt in the market from last week, triggering a one-point drop according to most players. Fir remains tight -- most volumes committed -- with little to none on the market. Buyers scrambled to find MDF supplies from other producers after news that an explosion and subsequent fire at a Montana MDF mill would halt production. Particleboard mills in both the West and East reported a satisfactory sales week. Enough sales took place to maintain order files.

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