Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Jan. 8, 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: Trading activity was lackluster overall in the SPF lumber market. Mill sales were described as steady but slow as buyers filled in inventory holes. Pricing, underpinned by order files touching into the week of Jan. 18, remained flat yet firm. Sales activity in the Southern Pine lumber market was sluggish, especially when comparing sales with some traders’ expectations for the beginning of the new year. Limited upward price movement and more opportunities for buyers to purchase at the prior week’s price levels or below also generated some caution among buyers. As the first week of the year wound down, Coastal species lumber producers readily admitted they expected better sales activity entering the new year. Buildups were minimal due to extensive downtime around the holidays. Weather, particularly heavy rains in California, limited the need for those yards to enter the market to replenish. Of the two major Inland species, Hem-Fir drifted lower during the holiday week, while Fir-Larch actually found some footing to move up a notch. While 9’ stud items proved difficult to locate, according to a number of buyers, 8’ remained plentiful. As a result, 8’ in both 2x4 and 2x6 remained soft and struggled to find trading levels. Both Radiata Pine and Ponderosa Pine industrial lumber have conflicting forces being exerted on them. Mldg&Btr lumber in both species remains reasonably firm. In boards, Ponderosa Pine items have changed from week to week, but it has been over a year since producers have reported a good stem-to-stern market. Decent demand in the field, especially in warmer-weather regions, kept Western Red Cedar flowing at a good rate from yards. Producers wanting a solid first quarter order file often managed to attain one.

Panels: OSB prices moved up in most zones and at most mill levels, strengthening on continued production rationalization. Buyers are still reluctant to take on volume, and mills only gave a few dollars on discounts for volume. Eastern Canada is the strongest region. Sales activity in the Southern Pine plywood market was dull. Producers managed to keep some semblance of an order file, with many lead times touching into the week of Jan. 18. However, spottier, quicker shipping volumes were available. Price adjustments for rated sheathing items were minimal. Sheathing prices in the Western Fir plywood market changed little during the week. Availability for those items ranged from prompt to the week of Jan. 25, depending on the mill. That prompt availability influenced the market more than longer lead times, leaving prices flat yet slightly soft. Heavy rains limited sales into California. Canadian plywood activity was quiet. Pricing is unchanged from the Crow’s net level established Oct. 23. A few deals were made under net, but mills are sticking with their sideways positions. Activity is largely LTL and inventories are low in the field. As expected by particleboard and MDF market mavens, buyers needing to replenish inventories came back into the market in greater numbers than the week prior. MDF availability at mills remained plentiful.

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