Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Sept. 12, 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: Trading in SPF lumber was sluggish, and quieter sales activity over the last few weeks allowed some discounts to creep into the market. Eastern producers were more open to discounting than their western counterparts. Slower trading forced deeper discounts into the market for Southern Pine #2 dimension lumber. Buyers retreated to the sidelines in greater numbers, trying to wait out the downward momentum gathering in the market. Traders, however, often reported “good” business in the field. Slower sales prompted Coastal species lumber producers to adjust quotes downward in some instances. Green Doug Fir narrow prices exhibited the greatest weakness, while wide widths in both dry and green held up well. Inland lumber prices would appear to be stagnant, but that is not the case. All widths in Inland dimension lumber are difficult to find, which is especially true of white woods. At times, white woods have been so scarce that no producer could quote them. Radiata Pine seems to be a questionable value relative to Ponderosa, given the fact the price has dropped in both Mldg&Btr and #3 Shop. Ponderosa Pine Mldg&Btr lumber has firmed at the levels established by buys made almost a month ago, and #2 Shop remains stable. Ponderosa Pine boards are still a little soft, particularly in the 1x8 and narrower widths in #2. Eastern White Pine remains firm in prices and market perspective. Western Red Cedar buyers continued to purchase spottily and often in mixed truckload volumes to maintain inventories or reduce them heading into fall. Some producers expressed surprise at how early some of their customers wanted to get in line for 2015 volumes.

Panels: In the face of slack demand, OSB prices have become very elastic and vulnerable. Regionally, perhaps the Mid-Atlantic is the softest area. Prices there have slipped again, putting pressure on both the Southeast and Southwest. The North Central region shows perhaps the least weakness. Momentum in the Southern Pine plywood market remained downward, although a number of prices held up. Most of the declines existed in rated sheathing, where discounts of $10 to $15 were common. Wholesalers countered deeply while trying to cover shorts. Western Fir plywood producers sold enough volumes at lower prices to move order files into the week of Sept. 22. Buyers remained leery of pricing, purchased fill-in volumes and wanted orders to ship as soon as possible. Talk of cautious firmness in the Canadian plywood market gave way this week to admissions that the market has weakened. As with any market shift, the precise degree of that weakness is a matter of debate, but almost everyone in the industry will accede to a two-point drop; some are saying more. Particleboard producers reported steady business with little fluctuation in volumes sold. MDF sales were flat. Mills rarely reported selling much more volume than the week prior.

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