Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for April 22, 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: Urgency among many mills to sell remained in place in the SPF lumber market. Competition from secondaries made it that much more difficult to move production. Buyers remained cautious in response to downward price direction. Southern Pine prices continued to move higher. Solid demand from truss manufacturers to treaters kept the market strongly balanced. One negative aspect of the market was the interrupted flow of product in Texas because of heavy rains and flooding throughout the week. Most Coastal species prices remained weak. Buyers trying to manage their purchases, keeping inventories in check, demonstrated only moderate interest in buying. The consensus among Inland producers was that it was “a pretty slow week.” This is a continuation of the very modest pace of business that has dominated the last two weeks, the result of a standoff between buyers and sellers. After many of the price declines were registered in SPF studs the week prior, other species joined the downward march this week. Cuts of $5 to $10 dominated pricing, although deeper discounts were apparent. Radiata Pine 5/4 blanks from Chile have slipped to $930 and blocks to $875. Most Ponderosa Pine lumber is readily available. Some notable discounting took place on both 5/4 and 6/4 Mldg&Btr, lowering both by $20. A little increase in sales generated enough interest in #2 Common to push prices up on most items by $5. Sales into the upper Midwest and Mexico both show enough volume to encourage firmer positions by sellers. Prices continued to move higher in the Western Red Cedar market. Mills often possessed order files out as far as they wanted to extend them, as supplies clearly lagged demand.

Panels: Pricing for OSB topped out from last week and only took minor tweaks up or down. Though sales were mostly quiet, sources sense a need for wood in the field. Buyers are reluctant to jump in at current levels, though. Some Southern Pine plywood producers took a more aggressive approach to pricing, discounting rated sheathing $30 in some instances at midweek. The low prices improved liquidity. Although prices ended the week down, mills raised quotes up off the week’s lows in response to moving order files out another week. Western Fir CDX plywood pricing continued to drift lower. Producers with quicker shipping availability tended to seek sales at more aggressive price levels. The lower levels prompted some carload buyers to participate. Canadian plywood activity caught a spark this week, and almost everyone played. Warmer weather, the upcoming removal of QC road restrictions, and broader retail sales contributed to a wave of optimism. Pricing began to move Tuesday, ending the week six points higher. In the South and East, particleboard producers carried strong order files extending into the latter half of May. Overall, MDF sales lagged particleboard demand. Thin MDF remained tight in the West, in response to the continued shutdown of a British Columbia mill.

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