Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for March 25, 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: Trading activity in the SPF market subsided, more notably after futures started to reverse direction and move lower Wednesday. Market pricing edged higher early and flattened as the week progressed. Wholesalers still held positions they needed to sell. Tight supplies continued to propel wide width pricing significantly higher across all zones in the Southern Pine market. Substantial volumes in the hands of wholesalers left the market two tiered. Most pricing in the Coastal species market remained firm to higher, although a few exceptions remained in place. Hem-Fir pricing was the standout, experienced strong demand and much higher prices. Inland species producers reported some modest spreads in the prices of Std&Btr/#2&Btr lumber, but they were in common agreement that “some solid price gains” had been made. Solid demand in the first week of spring continued to push several stud prices moderately higher. Those that did not increase managed to hold onto levels established at the end of the prior week. Regarding Radiata Pine, all Shop prices are stable. The price of New Zealand Mldg&Btr continues to be defined by the cost of logs, which remains very strong; Mldg&Btr remains unchanged. Tightness and generally modest supply defines the situation in Ponderosa Pine Mldg&Btr. Although both 5/4 and 6/4 remain firm in price, most of the action centers on 5/4. Ponderosa Pine Selects and Commons prices improved. Price gains were reported in several items in all of the Commons, from #2 through #4. Price changes, especially in #4 Common, were reported for ESLP boards, but Eastern White Pine and Idaho White Pine were generally unchanged. Sales remained strong and prices stout in the Western Red Cedar market. While buyers continued to look for alternative sources after last week’s mill closure announcement, producers downplayed any notion that demand had reached a frenzied pace.

Panels: OSB markets were relatively quiet this week, although mills were able to move order files out anywhere from the weeks of April 11-25. With that came a strengthening in mill level prices. Southern Pine plywood producers accumulated enough orders to maintain rated sheathing prices. Prices for thicker rated sheathing panels nudged slightly higher early and then held at those levels throughout. Mill lead times extended into the weeks of April 4 and 11. Strong sales led to higher prices in the Western Fir plywood market. Participation from a broad range of buyers combined with a tendency to purchase moderately more volume. As a result, producers focused on raising prices more aggressively than extending order files. For Canadian plywood, markets were quiet this week with order files still mostly into April 11. Most market players were away at the Montreal Wood Convention, then took Good Friday off. Particleboard producers in the East, where sales remain the strongest, continued to sell at a strong pace. With ship dates extending a month or more, buyers got back in line to make sure they had coverage for May. Producers of MDF continued to report strong competition with significant volumes of imported stock.

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