Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for April 1, 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: Sales activity in the SPF lumber market remained robust, leading to higher prices in both the East and West. Producers managed to extend order files, but some availability in the week of April 18 remained. Bullish futures lent confidence to the cash market. The turn to a more moderate pace of sales in the Southern Pine market over the last few weeks generated excesses of some items, prompting more discounts. Nevertheless, most prices continued to increase. Hem-Fir continued to exhibit relatively strong upward price pressure in the Coastal species market. Dry Doug Fir struggled to gain much traction. Mills focused more intently on making sure orders shipped prior to month- and quarter-end. Inland lumber producers have seen their market improve little by little over the course of the last month. It now appears to be adding a little more steam to that movement, especially in the Hem-Fir narrows. Stud prices exhibited less volatility; however, any price movement remained upward in most instances. Traders noted a good tone to the market, despite limited price appreciation. Radiata Pine Mldg&Btr has shown some changes, increasing in price as the cost of New Zealand pruned logs pushed mill lumber levels higher. This, alone, has served to keep Ponderosa Mldg&Btr prices secure. Ponderosa Pine Shop prices have been strongest in #2 Shop, which has been produced in considerably less volume than #3 Shop, P99 and Shop Outs. Market progress in 4/4 Ponderosa Pine boards is coming in small increments. The most active of the Ponderosa Pine Common boards is, and has been, #2 Common. There was no letup in demand in the Western Red Cedar market. From producers to retailers, sales activity remained solid. In most parts of the country, mild weather contributed to strong sales.

Panels: OSB activity varied from region to region. Western Canada was clearly more active than eastern Canada, and the western US generally surpassed the South in terms of sales activity. Sales activity at Southern Pine plywood mills was restrained, in part due to imports entering the US. Mills producing a wide array of products said they are struggling less to sell specialty panels than rated sheathing. Mills reporting a slower beginning to the week saw the pace of sales pick up at midweek in the Western Fir plywood market. Others sold more steadily throughout the week. Both experiences contributed to higher prices. Activity in Canadian plywood was busy enough to maintain current price levels very firmly, but not active enough to generate any general increases. Mill order files are strong enough to insulate producers from any strong attempts to counter. Particleboard sales continued at a steady pace. Eastern producers continued to sell strong volumes. Meanwhile, western producers tended to describe market activity in somewhat less glowing terms. Thin MDF activity remained heightened by the shutdown of West Fraser’s MDF mill in early March.

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