Market Recap: RISI Crow's Construction Materials Cost Index

 A price index of lumber and panels used in actual construction for Oct. 3, 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: Futures gains prompted short covering as early as Tuesday in the SPF market. Further gains in futures throughout the week gave buyers even more confidence, generating “steady sales activity” at mills through Thursday. Southern Pine mills did not exhibit quite as much urgency to sell at the deep discounts apparent the week prior. The market in the West was notably more improved than the Central and East zones. Demand for Coastal species improved as the week progressed, allowing producers to firm up some prices. While mills edged some prices a few dollars above early discounted levels, traders considered pricing overall “flat.” Good activity on Wednesday marked a turnaround for Inland lumber. Much of the focus of this week’s action was on Hem-Fir lumber, as opposed to Fir-Larch. After stud mills discounted some items early, they firmed prices and raised many of them by Thursday, as more buyers decided to fill needs. Radiata Pine is more stable in the blanks than it has been, enabling sellers to realize a few more dollars for their stock. The price drops that marked Ponderosa Pine in both #3 Shop and P99 have stopped for now, and Mldg&Btr lumber has actually rebounded by $10 since its sharp drop of almost two months ago. The competitive atmosphere in Ponderosa Pine 4/4 Common boards has tightened a little more. Inland Cedar has also taken on a more lackadaisical tone, affecting the prices of 1x6 and 1x8 #3 especially. Eastern White Pine prices show fewer changes. Producers continued to sell Western Red Cedar at a decent clip. While trying to sell volumes to fill in this month’s order file, producers exhibited little urgency to sell mild buildups, citing little inventory in yards.

Panels: Confident a pricing bottom was reached, OSB purchasing picked up in most regions and larger blocks moved this week. Nothing earth-shattering, for sure, but the pulse of activity was moderately improved. Several producers noted that Southern Pine plywood sales were not as strong as the week prior, but demand, particularly for thick rated sheathing, propelled several of those prices higher. Mills ended the week with order files most often in the week of Oct. 20. To move order files into the week of 10/20, Western Fir plywood producers shaved a few dollars off sheathing prices, especially where greater volumes were involved. Buyers waiting to purchase until running very low or out of stock was common. In Canadian plywood, Monday saw deals all over the map and inconsistent information offered on where pricing levels resided. But the discounting reported early dried up by Tuesday with levels down two points from last Friday. Particleboard mills reported good sales activity, spurred in part by customers manufacturing various items for the upcoming holiday season. Some mills sold better MDF volumes than the prior week, allowing them to solidify their order files.

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