Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for April 28, 2017.

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 mill quotes raised to counter costs associated with newly implemented duties on Canadian lumber entering the US kept buyers from participating. While producers sometimes quoted prices well above those already snubbed by customers, buyers clearly expected the next price move to be downward. Southern Pine sales activity got off to a sluggish start, some of it blamed on traders directing their attention toward the duty announcement. However, it became clear as the week progressed that buyers had put their PO books away. Sales activity was less than stellar across all Coastal species. Producers, however, did not have an abundance of lumber to sell for quick shipment, so they managed to hold onto price levels and even nudge them slightly higher in a few instances. Demand for Inland lumber remains good. Inland mills report significant difficulties getting logs, with some reported shutdowns. Some SPF stud producers tacked another 20% onto quotes that buyers had previously snubbed, distancing them further from what buyers were willing to pay. Those producers sold nothing. Other producers tried more earnestly to locate a level at which buyers might participate, with limited success. Demand for Radiata Pine Shop has increased, but prices have shown no change. Ponderosa Pine Mldg&Btr lumber has moved up in price, at least in part as a sympathetic reaction to rapid advances in Shop prices. Ponderosa Pine 4/4 Selects continue to be firm and unchanged in price. Ponderosa Pine Commons have responded to a solid increase in demand for all grades. Having spent the year raising prices sharply “because of the likelihood of duties,” Canadian Western Red Cedar producers considered raising prices more after learning they would need to pay 20% duties on shipments to the US.

Panels: After a period of strong activity and price jumps, OSB markets went into a digestive phase last week, which continued through this week. Buyers on the retail end are increasingly cautious at current price levels, wondering if numbers may fall in coming weeks. Southern Pine plywood sales were uneventful in the sense that they provided only modest price volatility, but producers were unanimous in their view that it was “a good sales week.” In rated sheathing, producers held prices and bumped them a little higher. Following a slow start to the week, sales activity in the Western Fir plywood market improved marginally. Nevertheless, it did not stop mills from approaching the market with lower quotes. Modest sales over the last few weeks eroded order files to the point where discounting was necessary. For Canadian plywood, markets are driven still by solid demand from the Vancouver market; sales into the US; no US wood coming in due to pricing/exchange rates; ongoing operational issues at a major producer; lean inventories; and improving weather. Demand for particleboard remained at a pace high enough to keep prices stable and order files at arm’s length. MDF sales were solid, particularly in the East. Prices in that region were firm to higher.

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