Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Jan. 29, 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: Sales activity in SPF lumber began to improve Tuesday and picked up momentum Wednesday. Buyers needed to purchase and often used gains in futures as an incentive to do so. Producers cleaned up excesses and managed to accumulate order files that, in a few instances, extended into the latter half of February. Prices continued to decline in the Southern Pine market; however, they began to stabilize in the West zone, and a degree of firmness filtered into the Central zone. Demand within Texas was key to the pickup in activity. Demand improved enough in the Coastal species lumber market to generate a bottom for some prices. Others remained soft throughout the week. Mills sometimes lowered prices sharply to move a specific item before month-end. An essentially flat week regarding prices of Std&Btr/#2&Btr Inland species kept the market dull. The slight variations that occurred in #2&Btr lumber were not reflections of change, either up or down, in the overall pace of the market. Like many other lumber items, demand for studs improved, providing a floor for a number of prices. In general terms, 8’ did not gather the same momentum as 9’. Radiata Pine is becoming ever-more disjointed, as South American supplies define their own markets, distinct from New Zealand material. Major buyers appear ready to pull the trigger on some spring volume of Ponderosa Pine. Sales of Ponderosa Pine #3 Shop resulted in price reductions for most of the Ponderosa Pine boards. Idaho White Pine Sterling is selling at $825; Utility is being sold at Ponderosa Pine #4 Common prices by key producers. Several Western Red Cedar producers reported slow sales activity, but activity in Texas remained strong. Producers cited no reasons to lower prices, reporting few excess in their inventories.

Panels: Following big snows along the Eastern Seaboard and heavy rains in the Deep South, OSB activity slowed to a crawl this week. Lack of interest in the western US and Canada took its toll on pricing, where mill and delivered zones took double-digit tumbles. Comfort in knowing there is little downside to a Southern Pine plywood market where average rated sheathing pricing has reached multi-year lows, buyers participated in greater numbers. Wholesalers purchased sizable volumes, sold them readily, and then came back into the market to purchase more. Western Fir plywood mills reported improved sales activity, helping to stabilize weak sheathing prices and bolster order files. Producers often managed to sell off prompt wood and move lead times into the week of February 8. The tone in the Canadian plywood market is becoming antsy, with players champing at the bit to get into spring sales. Activity is steady, but not brisk, and inventories remain low in the field. Particleboard sales remained steady. Some producers noted that customers in some regions like the Midwest continued to purchase better volumes than expected this early in the year. Pressure from imports was evident in the MDF market.

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