Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Dec. 23, 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: Carrying order files extending into the week of Jan. 11, SPF lumber producers bumped prices higher. The Canadian dollar weakened to $1.39 versus $1.00 US, contributing to elevated prices for Canadian buyers. Wholesalers moved strong volumes near mill price levels to buyers looking for quicker shipping deliveries. Sales activity in the Southern Pine market slowed. Price increases in the single digits were more a result of thin availability than the week’s demand. Prices of #2&Btr in the Coastal species market were often negotiable, depending on the particular item a mill needed to sell. A lack of market activity was somewhat offset by current and upcoming mill shutdowns around the holidays. Despite those shutdowns, buyers showed “little urgency,” according to a producer. Although producers in the Inland region are resisting any further price erosion, some slight declines have been reported. Both Fir-Larch and Hem-Fir Std&Btr/#2&Btr lumber eased down from $2-5. Changes have focused on the narrow widths. Stud pricing was flat to moderately higher in most instances. Increases often amounted to $3-5. Mills often carried order files extended out into early January. Eight-foot generally remained more plentiful than 9’, with some prompt carloads of 8’ available. Conditions in both Radiata Pine and Ponderosa Pine have led one source to say, “We need some changes, some big changes.” Among those changes he noted were: New Zealand pruned log prices create immense pressure and the Ponderosa Pine resource is pressured by fire-burned timber. In Ponderosa Pine boards, conditions in the economy and production realities have left weakness in the lower grades. Prices remained steady in the Western Red Cedar market. A growing return on Canadian shipments into the US prompted Canadian producers to raise some prices for their domestic customers.

Panels: Activity in the OSB market picked up last week and continued until things went quiet for the holidays on Wednesday. Prices improved from last week, most notably in the western delivered zones. Order files are generally into the first and second weeks of January. Producers seemed satisfied with the Southern Pine plywood volumes sold during the short week. Order files extended out into the weeks of Jan. 4 and 11, prompting mills to raise rated sheathing quotes moderately. Sales activity in the Western Fir plywood market slowed. Production curtailments and order files extending into the weeks of Jan. 11 and 18 provided some impetus for mills to adjust quotes higher. Canadian plywood markets are firm, with upside potential felt by all sources into the new year. Pricing is unchanged at last Friday’s Crow’s net level. Order files are mostly the week of Jan. 18, though some volumes are available sooner. Buyers want quick shipment. Particleboard and MDF sales activity was “understandably slower” prior to the holiday. Production downtime at mills helped balance supply and demand. Some customers ended the week prior by placing orders to cover needs for this week.

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