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: Buyers often limited their SPF lumber purchases to must-have needs, forcing mills with more modest order files to seek sales at discounted levels. Mills with order files into early July continued to maintain quotes at prior levels. Liquidity in the Southern Pine market was decent, but not enough to build much in the way of price momentum. Inventories in the distribution chain were relatively modest. Buyers often pointed to approaching month-end and the July 4 holiday as reasons to be cautious or delay purchases. Downward moves were numerous in the Coastal species market and most prevalent in Hem-Fir and green Doug Fir. Conditions in Inland species have been listless for the last few weeks. In Std&Btr/#2&Btr lumber, a modest but unchanged range of prices exists among producers. Prices were mixed in North American stud markets. Limited sales forced some prices lower. Other items actually experienced an increase in demand, enabling some mills to raise prices by the week’s end. Radiata Pine Mldg&Btr advanced quickly earlier this spring, based on pushes in pruned log prices. Those prices have held firm for a number of weeks. Ponderosa Pine Mldg&Btr is stable, although more readily available in the northern producing region than in the Southwest. Shop is also stable, with ready availability in all grades. Ponderosa Pine 4/4 Select prices were unchanged this week, having made a few strengthening moves two weeks ago. Idaho White Pine is very thinly available from key producers; their inventories being broken. ESLP boards showed catch-up price gains in #4 Common, and Eastern White Pine is unchanged in prices. With the end of the second quarter rapidly approaching, Western Red Cedar producers focused more of their attention on selling aged or the least desirable items sitting in their yards.

Panels: Price concessions in OSB slowed this week, still dropping in most regions but in the single rather than double digits. Sources said that they think a low has been reached and point to a slight pick-up in activity as mill order files moved out more solidly into mid-July. Southern Pine plywood producers reported a second consecutive week of better sales activity. While some prices held firm, others managed to edge moderately higher, including rated sheathing numbers. Sales activity in the Western Fir plywood market remained solid, leading to higher prices. While higher prices were a result of improved demand, loftier pricing generated some hesitation among buyers to buy back in. Opinions regarding the health of Canadian plywood markets were varied, some predicting a firming trend in coming weeks while others wonder if weakness will spread further. Pricing opinion was all over the map as well, and today shows a three-point drop. The same trends continued to take place in particleboard and MDF markets. MDF sales activity remained robust, leading to continued lengthy order files. Eastern particleboard producers continued to sell strong volumes.

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