Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Nov. 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: Producers lowered SPF lumber prices by varying degrees, depending on how bad they needed to rid themselves of slow-moving items. Producers sold loaded railcars at double-digit discounts. Expectations regarding sales prior to the Thanksgiving holiday were limited. All Southern Pine #2 dimension prices were susceptible to discounts. Even with the price cuts, disinterest among buyers made it difficult for producers to sell. Buyers showed more interest in maintaining low inventory levels. Sales were sluggish in the Coastal species market and several prices came off more aggressively in the latter half of the week. Loaded railcars sometimes sold at levels $15-20 below last week’s market levels. Most Inland producers have two-week order files on key items, which has saved them from perhaps greater weakness in lumber prices. Some price weakening has occurred, but it has been selective. Buyers tried to limit stud purchases when possible, continuing to place downward pressure on most prices. “We’re not buying much,” said a major distributor in response to inventory reductions, while noting that consumption remains good. Buyers are saying that the gap between Radiata Pine and Ponderosa Pine makes it favorable to purchase Ponderosa, and some are projecting first quarter purchases of Ponderosa. In boards, Ponderosa Pine Selects continue to be very stable in both price and selling pace. Producers report no problems with accumulations of any sort. In Idaho White Pine, most of the Sterling left consists of broken tallies. Standard grade has slipped in most widths, and slight adjustments have been made in Utility. Western Red Cedar mills reported shipping decent volumes of lumber during the week to yards seeking to replenish inventories in advance of the new year. Producers often noted they would be shipping greater volumes in December for January arrival.

Panels: OSB activity took on a more muted tone this week after markets faltered and went digestive last week. Buyers are skittish about taking any positions, especially with holidays pressing in and winter weather now in play. The Southern Pine plywood market strengthened to some degree. Traders often cited production curtailments for helping to limit supplies. Wholesalers, taking into account the cutbacks in production, stepped in to purchase moderate volumes. Producers needing to sell Western Fir plywood most urgently lowered prices significantly. Those low prices did attract buyers out of the East who purchased in carload volumes. Even at those lower price levels, buyers showed marginal interest, which by the week’s end, left some producers with considerable volumes available for shipment in the week of Nov. 23. Some early week discounting generated activity in a Canadian plywood market that had gone quiet recently. Once some wood was moved, producers firmed back up where they started. Particleboard sales overall were “steady.” Prices held at the same levels. Imports continued to make it difficult for MDF producers in the East to sell the volumes needed to solidify prices.

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