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Market Recap: RISI Crow's Construction Materials Cost Index

2/29/2016

A price index of lumber and panels used in actual construction for Feb. 26, 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: Portrayals of SPF prices and overall activity included “flat,” despite some moderate price increases. Having purchased needs, buyers stepped away. Meanwhile, producers carried solid order files, often extending into the middle of March. Southern Pine #2 pricing remained mixed. An imbalance between supply and demand exerted downward pressure on 2x4 and 2x6 across all zones. Producers often reported few excesses in their inventories. This limited the depth of discounts despite it being month-end. Prices of Coastal species lumber remained mostly firm to higher. Producers carried order files or sold prompt shipping lumber with little problem. Concerns over shrinking log decks in Southern Oregon persisted. Inland lumber producers have seen their market take on renewed life in the last three weeks. This week was termed “solid but not glitzy.” Price increases continue to be achieved in both Fir-Larch and Hem-Fir. The stud market carried enough momentum into the week to maintain price levels or keep them moving moderately higher. Depending on the item, producers reported both prompt shipping availability and lead times extending into the middle of March. Radiata Pine lumber shows no price variations this week. Blanks are being sold in a range of $950-990. Ponderosa Pine Mldg&Btr remains scarce, with no change in the price of either 5/4 or 6/4 material. In the same way, all upper grades of Shop are not widely available. Ponderosa Pine 4/4 boards have begun to show some firming in the lower grades. Inland Cedar activity in boards is good and solid. Sales activity in the Western Red Cedar market continued to improve in the absence of severe winter weather. Yards reported selling good volumes and called mills frequently to re-order. Seeing some tightening of mill supplies, buyers tried to line up second-quarter needs.


Panels: Sales of OSB were steady this week, but not as robust as the past two. However, sources see moderate strength in the market, describing the current lull as a “digestive” phase. Prices continued their upward trend. A reasonable balance between supply and demand remained intact in the Southern Pine plywood market. Distributors continued to fill inventory holes without purchasing major volumes. Producers collected order files extending as far out as the week of March 14. Prices in the Western Fir plywood market failed again to gain any traction. A few prices have established new multi-year lows, forcing mills to draw a line in the sand. Sensing little to no tightening of supplies, buyers continued to purchase hand-to-mouth. Canadian plywood activity remained slow this week, although it entered a transitional phase with a slip in pricing – the first change in four months. Pricing fell a point from last Friday’s Crow’s net at midweek, then dropped another two points by the end of the week. Knowing of weakness in MDF, buyers often countered producers, leading to negotiated deals. Particleboard sales in the East and South remained robust, stretching mill order files to their limits.


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