Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Nov. 6, 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: Sales were sluggish in the SPF lumber market, but producers leaned on order files to maintain most quote levels. With many traders away from their desks for much of the week, attending the NAWLA Traders Market, expectations for market activity were minimal. Southern Pine prices were more vulnerable as buyers participated in fewer numbers and bought fewer volumes. Having replenished inventories, yards stepped away from larger purchases, buying fill-in volumes instead. The pace of sales in the Coastal species lumber market slowed, but momentum carried into the early week helped boost a number of prices moderately higher. Inland lumber producers reported that both inquiry and sales were “active early on in the week,” enabling them to keep prices nudging upward, as they have been for the last few sessions. Hints that the stud market was beginning to lose some steam appeared last week, but prices held or gained moderately. This week, a slower sales pace began to eat away at a few prices and leave others at levels attained the week prior. Radiata Pine Mldg&Btr continues to be marketed at unchanged prices. Ponderosa Pine 5/4 and 6/4 Mldg&Btr lumber continues to be in fair balance and shows no change in price levels. Both 5/4 and 6/4 Shop, however, are oversupplied and show an almost-constant counterability. Reports continue to indicate that Ponderosa Pine boards are hugely oversupplied. Eastern White Pine boards show modest variations from week to week, but they have generally been a little vulnerable on the top end and in the Industrial grade. Much of the attention in Western Red Cedar is focused on next year, although spotty sales continue to take place for this year’s deliveries. Closing in on winter, contractors are buttoning up homes or turning their attention toward the interior of homes.

Panels: With producers strictly controlling OSB production and buyers keeping inventories low in the field, pricing for panel inched upward yet again this week. However, several sources deemed the situation toppy, adding quickly that they anticipate little downside. Eroding order files forced a number of producers to lower Southern Pine rated sheathing prices in search of willing buyers. Even with the lower prices, interest among buyers was tepid, leaving most order files in the week of November 16 or sooner. Producers frequently described the Western Fir plywood market as “slow” or “quiet.” Most of the blame for the sluggish sales activity was placed on the number of traders attending industry gatherings. Canadian plywood markets continued a sideways but solid trajectory. Pricing is unchanged from last Friday’s Crow’s net level. Order files are into the weeks of November 23 and 30 among producers. Buyers tended to replenish MDF and particleboard inventories on a somewhat steady yet moderate pace. Year-end and inventory taxes in some states are making inventory levels even more critical in the last weeks of the year.

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