Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for April 24, 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: Trading in the SPF market improved over the previous week but not enough to mend the price situation significantly. Mills in the West limited the depth of discounts as the week progressed. In the East, the competition for orders forced mills to seek sales at double-digit discounts. A slow sales pace in the Southern Pine market forced mills to seek orders at lower prices. Buildups of 2x4 and 2x6 were most common, contributing to a stronger rate of discounting for those items. Buyers purchased significant volumes of Coastal species, but market weakness demanded those transactions be at lower price levels. “Customers are busy,” said a couple of producers. Looking for some sign of relief, traders clung to rumors of production curtailments throughout much of the week. Driven by aggressive offerings from Canadian sources, the price trend in Inland species continued to be downward. Although some wholesalers reported a slight increase in sales activity, it was not enough to turn the market around. Stud pricing remained weak. Despite an up-limit futures move Wednesday and subsequent improvement in sales activity, buyers remained unconvinced that prices were in much better shape than when they began the week. New Zealand Radiata Pine producers maintained strong order files and firm control of market prices. Limited supplies of finger joint blocks and blanks sold easily at market prices. Steady sales of Ponderosa Pine Shop continued, although reports of buyers switching from higher grades to better priced #3 circulated. Weakness in the price of #4 in several pine species persisted, forcing mills to discount in order to get the business. Limited production of Idaho White Pine and Inland Red Cedar helped keep prices for those items firm. Flat yet firm Western Red Cedar pricing remained in place. Demand is good and supplies are limited, helping to sustain price levels.

Panels: OSB markets started a slow turn this week, picking up a tiny bit of momentum across most of North America. That said, pricing remains soft, and the southern US is still in a funk with wet weather hampering jobs. Sales activity in the Southern Pine plywood market could not keep up with production. Buyers filled in inventories with limited volumes where necessary. Wholesalers also reported sparse sales to customers. Mills approached the Western Fir plywood market more aggressively early and lowered prices further as the week progressed. Secondary volumes headed east by rail, offered well below last week’s market levels, made it difficult for mills to compete in regions other than the West. Canadian plywood market activity picked up a little this week, though there remains a lot of wood in the pipeline due to a slow start in spring building activity. Particleboard producers in the East and South continued to sell strong volumes, limiting availability to buyers. MDF pricing held another week in both the East and West, with demand at western mills better than in the East.

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