Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Dec. 11, 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: Western SPF lumber producers managed to bump prices higher early on market momentum carried over from the week prior, particularly narrow widths. Order files extended into the first week of January. Wides exhibited modest weakness. Upward pressure was applied to most Southern Pine #1 and #2 dimension lumber items, a result of steady demand. Warm temperatures throughout much of the country kept wood flowing from yards. Although it did not often equate to higher prices, Coastal species traders experienced slightly improved sales overall. Buyers sensed mills wanting to establish some cushion heading into the holidays, trying to enhance their order files. Inland lumber producers report a quieter session than last week, with both Fir-Larch and Hem-Fir lumber feeling some downward pressure. Despite the lack of robustness in the pace of sales, the market has some liquidity. Improved demand reversed the direction of stud prices, sending many of them higher. As the week progressed, mills quoted less product, adding upward pressure to prices. Radiata Pine Mldg&Btr continues to sell in a range of $1375-1460, as reported last week. The prices in this range are all valid, depending on the source of the material. Abundant availability of Ponderosa Pine industrials in the lower grades have created some price instability in #3 Shop, Shop Outs and P99 for much of the year. Ponderosa Pine Selects and #2 Common boards are of no pricing concern to producers, because they are produced in little enough volume to cause much mill accumulation. No significant decline in Western Red Cedar pricing was evident as the market nears the first day of winter (Dec. 22). Buyers continued to purchase mixed volumes for near-term deliveries when necessary.

Panels: Prices for OSB slid sharply again this week, coming off $10 to $25 in all zones. With holidays drawing near and accountants tightly controlling inventories at year-end, no one wants to take on wood. Sales activity in the Southern Pine plywood market improved, especially in the latter half of the week, allowing producers to extend their order files. Most rate sheathing prices held close to prior levels. Despite marginally better sales activity reported by Western Fir plywood producers, it still took discounts to move most sheathing volumes. Because of mill shutdowns around the holidays, lead times ranged from prompt availability out to early January. Canadian plywood markets continue doggedly forward, showing steady activity based on just-in-time needs. There is no anxiety among participants, and pricing remains unchanged from last Friday’s Crow’s net level. MDF and particleboard producers and buyers often described market conditions as “typical for year-end.” Sales were depicted as “slow” to “mediocre.” Manufacturers have cut back buying considerably, some planning to take two weeks off during the upcoming holidays.

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