Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Sept. 19, 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 mills across Canada reported receiving few orders and adjusted prices accordingly, having little order file to lean on. Eastern mills continued to lower prices from last week, and western producers lowered quotes and listened to counters. Price often depended on volumes purchased. Southern Pine lumber mills reported very few sales, leaving prices susceptible to double-digit discounts. Traders described customers taking a “wait and see” approach. Wholesalers took on a more bearish tone, citing a falling futures market and downturn in August housing starts and permits. Prices often drifted lower because of lack of sales in the Coastal species lumber market. For most items, declines of $5 to $10 caught buyers’ attention, although green Doug Fir narrows sold at deeper discounts. Other buyers chose to sit out the market while prices grew weaker. Inland lumber producers are attempting to hold the line on prices, but some modest cracks did appear this week. Not all producers, however, softened their numbers, because the availability of stock is thin. Prices of Radiata Pine blanks have been pushed down temporarily by Ponderosa Pine. The greatest pressure has come in low grades of industrial Ponderosa Pine, where accumulations of stock have forced Ponderosa producers to discount to move material. Ponderosa Pine boards are being produced in sufficient quantities to create some softness in all grades, although price losses have been modest. Eastern White Pine 4/4 boards have felt the competition from Ponderosa, and they show some pressure in their prices, especially in Standard stock. Little inventory at Western Red Cedar mills again generated no incentive for mills to lower prices, despite relatively modest sales. Producers and their customers focused much of their attention on the fourth quarter and early next year. Purchases for near-term needs often consisted of highly mixed truckloads.

Panels: There remains absolutely no sense of urgency in the OSB market, and from last week, prices softened broadly – especially in the Southeast and Southwest. People are buying what they need, and that is it. Demand for Southern Pine plywood increased as early as Monday morning, and several producers reported steady business throughout the week. Participation from a broad range of buying segments contributed to firmer rated sheathing prices. A slightly improved tone to the Western Fir plywood market the week prior turned up a few notches as demand, fueled by fire damage to a veneer mill in Northern California, picked up significantly on Tuesday. As Canadian plywood finished last week down two points, so went this week. By Friday, takes on the market varied from down six points to sideways from last Friday. Mills seemed more open to cut deals early week, but firmed up as activity increased by week’s end. Particleboard sold in enough volumes to satisfy producers, keep prices firm and maintain solid order files. Producer of MDF often described sales activity as “fair.” Prices maintained previous levels, showing no inclination to adjust in either direction.

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