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: Trading in the SPF market was influenced by a wide gap between the futures board and cash. Buyers pointed to the disparity as a reason to hold back purchases. Western mills held quotes at price levels established the week prior. Eastern mills occasionally discounted but market levels held up. Southern Pine producers experienced a wide array of sales activity while prices indicated a gradually improving market. Good takeaways from yards prompted buyers to continue replenishing. Pricing was largely flat to moderately lower in the Coastal species market. Although some mills pointed to days where sales activity perked up, the overall tone was lacking. Buyers covered immediate needs and little else. Inland producers experienced a “very modest” week. One source defined the action as being, “Steady at a low level.” Lack of energy from the market made price appreciation difficult, although a few producers did push dimension narrows an additional $5 in Hem-Fir. Traders often described the stud market overall as “flat to down” due to limited sales. Prices of 2x4 8’ seemed to hold up better than other items. Meanwhile, discounted 2x4 9’ remained prevalent across many species. Both 5/4 and 6/4 Radiata Pine Mldg&Btr are unchanged, no discounting for one-off deals, but some respectable discounts can be negotiated for volume orders. Ponderosa Pine industrials are unchanged, although ample is available. Good demand for Ponderosa Pine Selects and improved export sales in both #3 and #4 Commons have enabled pine producers to move some of their numbers up a few dollars. Idaho White Pine, ESLP and Eastern White Pine show only minor deviations from recent lists. Momentum in the Western Red Cedar market remained strong. Recent price increases took hold with little pushback from customers.

Panels: Spookiness persists in the OSB market, as buyers take no position except to watch as pricing deteriorates further in almost all regions. Takeaway is steady given the time of year, but only immediate needs are being purchased. Sales of Southern Pine rated sheathing increased to a point where traders tried to remember how long it had been since activity was so good. Modest inventory levels throughout distribution and reports that several mills will take some time off around the July 4 holiday spurred buying. Sales activity in Western Fir plywood improved markedly, prompting producers to press prices higher. Eastern buyers tended to purchase greater carload volumes, making a big difference in the marketplace. This, combined with steady truckload orders from western customers, led to lengthier order files. Canadian plywood markets took a quiet tone this week, with suppliers and producers watching each other for the next move. While some mills are firm, others reported asking a point over or listening at a point under. Particleboard sales remained strong in the East, stretching lead times to the extent producers desired – or beyond. MDF sales remained very strong, seeming to gain even more momentum with each passing week. 

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