Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for April 15, 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: Two weeks of slower sales activity placed downward pressure on SPF prices. This came after 10 weeks of rising prices. More urgency among mills to compete with those lower priced volumes owned by secondaries forced $5 to $10 declines in many instances. Some Southern Pine prices continued to fight their way through downward market pressures while solid demand and tight supplies kept upward pressure on others. Strong sales in the distribution pipeline kept buyers in the market. More Coastal species prices peeled back as the week progressed. Mills often reported decent liquidity but not enough to keep discounted volumes from entering the mix. Despite an overriding tone of quietness and modest demand, most Inland producers say they have garnered sufficient business to have met their volumetric needs this week. Price changes of the bellwether Std&Btr/#2&Btr lumber have been few. Slower trading activity left a number of stud prices weak while others managed to hold on at the prior week’s levels. Secondary-owned volumes, sometimes in transit, and producers running low on order files contributed to fragile SPF prices. Radiata Pine Mldg&Btr continues to be dictated by the prices of pruned logs. For that reason, no changes were reported this week. Ponderosa Pine Mldg&Btr and Shop show no price changes. The #3 Shop is much less abundant than it was a couple of months ago, according to reports, but it still invites counters as a matter of course. Activity in 4/4 Ponderosa Pine Selects is sufficient to maintain prices. Some strengthening has occurred in ESLP #2 Common. As a result of strong demand, Western Red Cedar producers are raising prices incrementally and broadly. A stronger Canadian dollar has given producers in that country even more reason to boost prices, in order to recover margin.

Panels: OSB prices continued their climb this week in all regions, though the escalations were not as steep as prior weeks. The market has a quieter feel with wood being digested. Greater volumes of prompt shipping Southern Pine rated sheathing hit the market, forcing prices to decline more severely. Despite the volume of imports, domestic producers continued to sell sanded panel items at a good rate. Sales slowed, and Western Fir plywood producers wanting to keep panels flowing lowered sheathing prices modestly. Although buyers stepped away from the market, traders generally perceived limited inventories at distribution and retail yards. The tenor of the Canadian plywood market remained a bit confused this week, as players continue to wait for spring to firmly take hold. While some producers continued listening to counters, there is also broad speculation that maybe things hit bottom recently. Particleboard pricing in the East was firm. Some producers in the West reported a busier last couple of weeks. MDF sales activity was buoyed by both moulding and flooring manufacturers. Thin MDF used in flooring production remained tight in the West.

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