Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Dec. 4, 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: SPF mills experienced moderate sales activity while exhibiting a need to sell selectively. While mills in the West tended to raise quotes for 2x4 and 2x6 #2&Btr, producers in the East held pricing or listened to modest counters for those same two items. Southern Pine producers ended the week with a significant amount of new orders. Having run their inventories down, yards replenished, contributing to firmer pricing throughout the market. Buyers often noted that purchases were for December needs. An uptick in demand at midweek steadied some prices in the Coastal Species lumber market. Overall, prices began the week flat to soft. Mills wanting to extend order files discounted some items more sharply than other producers early. The pace of Inland species mill sales shows a fairly mixed bag between Fir-Larch and Hem-Fir lumber. Fir-Larch prices have been, and remain, more stable than the Hem-Fir. Most stud prices continued to drift lower while a few managed to hold up. Prices for 2x6, particularly 2x6 9’ #2&Btr, held up the best. Meanwhile, 2x4 8’again proved difficult for mills to sell. In the last two weeks, Radiata Pine Mldg&Btr lumber from New Zealand has sold in a range of $1,375 to 1,460. Ponderosa Pine industrials have made a few adjustments over the last few weeks, chiefly in the very abundant lower grades of Shop, as well as P99 and Shop outs. Ponderosa Pine boards continue to be defined by strength on the top end of the grading scale, with ongoing softness in the #3 and #4 Common boards. Inland Red Cedar shows some price adjustments in the two-face proprietary #3 boards. Buyers of Western Red Cedar continued to purchase spotty and light volumes for quick shipment and larger volumes intended to replenish inventories sometime in the first quarter. This led to light shipping days but solid amount of ordering.

Panels: Buyers backed away from the OSB market during the past two weeks, attempting to avoid volume commitments. Activity is slowing in all markets given the time of year, and prices fell in all regions this week on the order of $3 to $20. Southern Pine plywood producers often maintained quote levels while listening to counters and negotiating price. The depth of discounts depended on the item, but the tendency was for mills to hold prices or lower them by single digits to move rated sheathing volumes. Price weakness continued to permeate the Western Fir plywood market. However, while any upside with regard to sheathing pricing was nonexistent, discounts were generally modest. Production curtailment announcements have influenced buyers’ approach to the market very little. Canadian plywood activity continued steady and sources reported good volumes moving into eastern markets. Producers took counters on anything left for December to get orders moved into January. MDF buyers managed to locate plentiful supplies available in the market. Despite the excesses, MDF prices held. However, discounts remained plentiful. Particleboard prices held, experiencing less pressure from oversupplies.

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