Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for August 12, 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: An up-limit futures move propelled SPF buyers into the cash market Tuesday to cover some needs. The jolt of fresh demand allowed producers to bolster their order files. Firmer quotes and modestly higher pricing for a few items also appeared. The sales pace in Southern Pine lumber slowed, but not enough to keep prices from increasing. Buyers digested previous purchases and bought more selectively when buying at all. A lack of much meaningful price volatility across Coastal species dimension lumber for the past several weeks weighed on traders. Wholesalers continued to back-to-back orders, seeing no advantage in taking up a position. Meanwhile, yards continued to move strong volumes and replenish inventories at a steady rate. Inland lumber producers noted that the week began more slowly than last week, but it “picked up late,” from Wednesday on. Carloads of Hem-Fir moved well and fir sales focusing on short-haul truckloads, according to one source. Again, stud prices were mixed. Demand for 8’ once again exceeded 9’, placing upward pressure on most 8’ prices. Prices for 9’ tended to hold or decline. Industrial lumber shows no substantial price changes in either Radiata Pine or Ponderosa Pine. Ponderosa #2 Shop is slightly weaker than #3, according to sources, because windows are weak. Both #3 and #4 Common remain abundant in Ponderosa Pine. Reports indicate that some very wide ranges are available on the Ponderosa Pine 1x10 and 1x12 #3 Common from a number of sources. Those ranges represent spreads of $50 and more among producers. Western Red Cedar producers continued to report a moderately slower pace to sales, but limited availability made it difficult to locate some items.

Panels: Buyers are lurking around the edges of the OSB market, making brief forays to take limited, necessary volumes and then stepping back. From last Friday, prices across almost all regions either drifted sideways or lost a few dollars. Toronto bounced up slightly, while Western Canadian mill numbers took the sharpest dip in sheathing. Southern Pine producers reported a “decent” week of sales activity, Sales activity picked up moderately as the week progressed, leaving rated sheathing pricing most often flat to $5 lower. Lead times at mills extended into the week of August 22, with some sales out a week further. Sales activity in the Western Fir plywood market picked up moderately at midweek after weeklong maintenance downtime beginning September 4 was announced at two mills. Producers, however, discounted sheathing in order to move lead times into the week of August 22. Canadian plywood saw a late-week flurry of activity, and sources happily reported strong sales. Inventories are thin through the entire system, buying patterns are essentially skirmishes, and buyers are checking deliveries closely and wanting loads early. Particleboard and MDF producers in the East and South continued to sell their products at a strong pace. Quick shipping particleboard remained available in the West while MDF sales in that region were strong.

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