Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Dec. 18, 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: Unseasonably warm temperatures throughout the eastern half of North America contributed to steady SPF sales, allowing producers to maintain or raise prices. Buyers entered the market at an orderly pace to purchase volumes from mills and often looked to wholesalers for quicker shipping volumes. Good demand and solid order files continued to provide lift to Southern Pine dimension prices. Mills often reported a moderately slower sales pace, which fell in line with traders sensing the market was easing into the holidays. Prices in the Coastal species lumber market struggled again to gain any traction. Producers often sold at price levels close to those established the week prior and accepted counters for those items where production exceeded demand. A generally quiet week with “very selective demand” was the report for Inland lumber. Pressure from Canadian lumber kept Hem-Fir prices on the soft side, but now Fir-Larch shows some further weakening, as well. Most stud prices remained on firm footing, led once again by strength in 9’. Pricing for 10’ items also exhibited solid gains across the board. In Radiata Pine Mldg&Btr, the situation with rising log prices has resulted in some market divergences. Although few price changes have been reported this week in Ponderosa Pine industrials, most grades -- including #2 Shop, #3 Shop, P99 and Shop outs -- are readily obtainable. Some changes in prices regarding Ponderosa Pine #3 and #4 Common boards have occurred. Inland Cedar producers report that boards are much less attractive to buyers than decking or other materials. Adjustments have been made downward on ESLP #4 Common boards. Western Red Cedar producers continued to line up orders for first quarter deliveries, consisting of enough volumes to extend some order files into the second quarter of next year.

Panels: Prices of OSB had dropped lower over the last several weeks, but on Wednesday a resurgence of buying in Canada redefined the market. The action was not as strong in US markets. Traders seemed more upbeat regarding the overall Southern Pine plywood market, a product of improved sales volumes, comfortable order files, and firm to higher pricing. More buyers looked to purchase volumes for delivery in the first days of January. Following a late push in Western Fir plywood demand the week prior, the announcement of a mill closure that will take place in early 2016 sent more buyers into the market to cover needs. Availability grew tighter as lead times at mills extended into early January and as far out as the week of Jan. 18. In Canadian plywood, as in OSB, buyers created a week of significance. Prices began the week lagging to lower and lower levels, but buying improved and prices firmed by Friday. Particleboard and MDF mills experienced seasonal slowing. Buyers focused little on the remainder of this year and more on purchasing for deliveries in early or mid January.

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