Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for March 20, 2015

*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: Gains in the May futures contract propelled some buyers back into the SPF lumber market. They tended to fill immediate needs and carried a significant amount of caution when approaching their suppliers. Producers listened more intently to prompt shipping inquiries, willing to cut prices more aggressively to secure those orders. Southern Pine lumber pricing continued to gradually firm. Those yards filling needs did so cautiously, although a sense of optimism regarding demand over the next few weeks does exist. Any improvement in sales activity in the Coastal species market was modest, which failed to stop prices from declining. Traders agreed that although the market did experience more fluidity, yards still have inventory to move before coming back into the market to purchase greater volumes. Inland lumber producers have found the week to be “still soft.” Prices of both Hem-Fir and Fir-Larch have drifted off for yet another week, although some producers sense that the market has been a bit more active. Activity in studs improved, limiting the number of price declines and the depth of those discounts. Radiata Pine lumber prices have been significantly influenced by exchange rates, but to a lesser extent than mouldings. Ponderosa Pine Mldg&Btr is very firm, as is all Shop at this point. Ample supplies of Shop exist, but at established prices. Buyers absorbed greater volumes, providing a base for prices but not necessarily a long lasting one. Ponderosa Pine #2 Common is quite stable for most producers. Ponderosa Pine #3 Common is also steady, and #4 Common remains a very difficult sell. Eastern White Pine prices are stable. Flow from distribution to end-users is slower than many traders had hoped in the Western Red Cedar market. Major producers report that customers still carry significant inventories established early in the first quarter.

Panels: Both producers and distributors of OSB commented on the general lack of activity from the field. Producer reactions to proposed business were generally to reject any discounted offers. Mills sales in the Southern Pine plywood market were a bit slower than the week prior, but producers managed to bump order files into the week of March 30. Wholesalers reported receiving close to replacement-level prices, but no premiums, from customers. Many Western Fir plywood buyers seemed satisfied with the volumes purchased in prior weeks, prompting them to step away from the market for the near term. While customers digested or waited on those volumes to deliver, producers leaned on order files extending into the weeks of March 30 and beyond. The baseline for the Canadian plywood market was a clearly drawn flat line. Despite the fact that their own yards are full, mills have no desire to scrub wood energetically at this point. Particleboard customers in the East continued to look westward this week for coverage, placing orders at those mills when they could not find availability closer to home. The same such market intensity does not hold true for MDF.

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