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Market Recap: RISI Crow's Construction Materials Cost Index

2/22/2016

A price index of lumber and panels used in actual construction for Feb. 12, 2016


*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: After a slow beginning to the week, in part due to holidays in both Canada and the US, SPF lumber trading activity picked up as early as Tuesday afternoon and gained momentum Wednesday. Traders credited futures gains for much of the uptick in demand. Having already purchased a lot of their Southern Pine needs at lower prices, buyers worked down inventories and purchased hand-to-mouth when necessary. Production outpaced demand at the mill level. Discounting was most prevalent in the West zone. Sales picked up at midweek in the Coastal species market, helping to keep upward pressure on a number of items. Mills wanting order files managed to keep them at a distance, while quicker shipping volumes sold readily at higher price levels. The Inland dimension lumber market, which has lacked positive energy for much of the last several months, is taking on new life. A midweek improvement in sales activity continued to press stud prices higher. Mills managed to keep order files at a distance, and limited availability played a role in strong pricing. Radiata Pine shows no significant changes in price, but the trends that have been in place remain. All Ponderosa Pine Mldg&Btr and upper grades of Shop are tight and fairly difficult to source. The availability of #3 Shop, P99 and Shop Outs created continuing volatility in those prices. This renewed demand has clearly spurred advances in some of the Ponderosa Pine #2 Common prices, but modest advances. The Utility grade of Idaho White Pine had accumulated and needed cleaning up, which took place at a hugely reduced $200. Western Red Cedar producers continued to fill customers’ needs at a good pace. Buyers where weather was best reordered after seeing good takeaways from their yards.


Panels: OSB markets picked up momentum this week once everyone was back from the long weekend. Pricing gained strength in all regions, mill and delivered. Business in the US western and southern zones was particularly brisk. Sales activity in the Southern Pine plywood market continued at “a steady pace,” allowing mills to move order files out into the weeks of Feb. 29 and March 7. Truck and mixed carload volumes sold at or very near the prior week’s price levels. Waning demand for Western Fir plywood placed downward pressure on sheathing prices. A production curtailment announcement, which will commence the week of Feb. 29, did little to stir demand. Canadian plywood activity slowed this week, drifting into the doldrums. Even the most bullish sources had little positive to say. Road restrictions for Quebec will come on March 14. Typically a market driver, the recent announcement had little or no impact. Particleboard sales in the East and South were strong, leading to longer order files at mills. In MDF, reports of importers approaching the market more aggressively surfaced, which suggested more price weakness in domestic markets.


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