Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for April 8, 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 slowed. Traders attributed the slower activity to the need for buyers to digest prior purchases. Many of these prior purchases were long positions established by wholesalers, which generated a two-tiered market. Persistent demand along the East Coast continued to propel Southern Pine lumber prices higher in that region. Further West, 2x6 and 2x8 #2 availability continued to outweigh demand, forcing mills to discount those items. Prices of other dimensions in that zone held up or moved higher. Sales activity in the Coastal species market slowed. Producers needing to sell for reasons including loaded railcars sold some items at discounts. Others, despite limited sales, preferred waiting to see whether demand would pick up soon. The incremental gains in Inland prices that have characterized the last few weeks have slowed some, but market activity remains steady enough to maintain current levels. Price direction was often described by stud buyers as “mixed”. Wholesalers’ long positions often sold at moderately lower prices than mills’ asking levels. This perceived market weakness forced mills to lower some prices to compete. Radiata Pine Mldg&Btr remains tilted upward, based on continual increases in pruned Radiata Pine logs. Ponderosa Pine Mldg&Btr is more readily available than it has been for some time, although no price changes have been reported. Of all Ponderosa Pine products, perhaps #2 Shop is in the best shape, although even it is not scarce. Ponderosa Pine 4/4 Selects and Commons have seen “no big changes,” according to one source, continuing to move along in a steady and unspectacular manner. Sales activity in the Western Red Cedar market continued at a steady and strong pace. Lengthy order files and persistent demand prompted mills to push prices higher.

Panels: OSB activity tapered ever so slightly this week, after what was described as a good run by most sources. Pricing strengthened again from last Friday. While some players suggested pricing is toppy, others project continued strengthening in the short term. Sales of Southern Pine rated sheathing continued at a pace unable to keep up with production. This left mills with scant order files and a growing need to sell volumes available for shipment in the week of April 11. Some producers held onto pricing while others tried to get ahead of a softening market. Sales activity in the Western Fir plywood market was not as strong as previous weeks. Mills quoted higher prices and achieved $2 to $5 premiums for CDX items. Order files were most often into the week of April 18, although some items extended further. In Canadian plywood, distributors and producers pushed hard into a market reluctant to buy. Despite midweek discounting and some volume deals, there was little follow-through. Particleboard sales remained steady to stronger. Demand in the East absorbed significant particleboard volumes. MDF mills experienced lackluster sales, although a few producers reported an increase in sales volumes.

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