Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for June 10, 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: SPF producers lowered prices early in an effort to beef up shrinking order files. Sizable purchases made Wednesday afternoon by a few large distributors and retailers and a subsequent up-limit move in futures stabilized prices and allowed producers to move quotes higher throughout Thursday. Following a pickup in activity the week prior and improved tone, the Southern Pine followed up with little momentum. Buyers kept purchases to a minimum. The inability of yards, particularly in parts of Texas and Florida, to deliver to rain soaked job sites constricted the flow of lumber. Pricing was often described as “mixed.” Trading was moderate in the Coastal species lumber market, leaving most prices at or near the prior week’s levels. Some traders reported a pickup in demand late in the week, attributing it to a strong up-limit move in futures Thursday. Inland lumber producers continue to show some surprise that the market pace and prices are basically firm and very near recent levels. Fir-Larch has shown a slight tendency to slip back a little, but Hem-Fir continues to firm modestly. Stud pricing was mixed, with price direction often depending on the length. Nine-foot pricing remained weaker than 8’ overall. Some “fence sitters” jumped in to buy Thursday, firming prices. Radiata Mldg&Btr pricing is stable, and Ponderosa Pine Mldg&Btr is tight in the southern producing zone but slightly more available in the heart of the northern producing region. In boards, Ponderosa Pine Selects and Commons have been marked by some price strengthening in recent weeks. Sales activity at Western Red Cedar mills was steady to better after some traders noted a slower pace to the market the week prior. While some producers tried to limit their volumes sold in August, wary of potential fiber restraints, others readily sold for shipment in that month.

Panels: Market gyrations in the weeks following a wood yard fire at Norbord’s High Level, AB, mill landed OSB markets in the current state of disarray. Buyers are cautious and pricing destabilized over the week. Southern Pine plywood sales remained “a grind.” To get order files into the week of June 20, producers again had to nudge rated sheathing prices lower. The extended downturn in rated sheathing prices prompted producers to begin talking about reducing production. “Decent” was used quite frequently to describe the week’s trading activity in Western Fir plywood. Some producers added that activity did not meet the prior week’s levels, but they did sell more for shipment into the week of June 20 and experienced some sales in June 27. Canadian plywood sales were reported slow but steady this week, feeding into a system containing lean inventories. Mills are firm. Order files are out to June 27 at most mills. Particleboard sales remained steady in both the East and West. A wide array of buying segments looked for additional volumes from eastern mills. In MDF, recent decreases in the overall supply again forced buyers to look for alternative sources.

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