Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for May 5, 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: After a sluggish beginning of the week, an increasing number of SPF buyers stepped into the market late Tuesday to purchase measured volumes. Steady albeit moderate sales activity persisted through Thursday. Confusion in the market continued, extended by the array of mill prices in the marketplace and various rumors regarding mill shutdowns and upcoming duty procedures. Pricing in the Southern Pine market grew weaker as the urgency among mills to sell greater volumes increased. Buyers filled in where necessary with minimal volumes, expecting the downward trend in the current cycle to continue. The general features in the Coastal species market persisted: green Doug Fir demand kept upward pressure on some prices while buyers showed limited interest in dry items. High price levels left buyers guarded, especially as downside risk developed. Inland lumber has been solid without fanfare in recent trading. The inquiry and selling paces are steady. The spread between #2&Btr lumber and Select Structural lumber remains very tight, in some places being almost identical. Both producers and buyers of SPF studs attempted to locate firm sales price levels, with modest results. While 8’ pricing held up in most instances, 9’ discounts were widespread. Radiata Pine Shop is being purchased by China and Mexico, and importers report that they can find very little for the US market. Ponderosa Pine industrial lumber has been active and sought after this spring. In Shop, 5/4 #3 and P99 have been the definers of the market pace, continuing to escalate almost weekly. In boards, Ponderosa Pine 4/4 Selects remain in an extended balance, with no changes in either pace or price. Common boards are still being led by #3 and #4, which are just a reverse image of what they were a year ago. Western Red Cedar demand continued to fill out mills’ order files at a steady rate. Supplies at mills remained relatively tight, prompting some to again raise prices.

Panels: OSB markets slowed to a crawl this week with mills and buyers in a standoff. Buyers believe pricing is too high, and mills are trying to hold the line. Spotty block discounts were made to move files, but not far off established levels. Sales activity in the Southern Pine plywood market was lackluster. Buyers approached the market somewhat cautiously, often purchasing fill-in volumes, shying away from taking up a position. Western Fir plywood buyers bought sparingly again this week. As a result, mills sold volumes into the week of May 15, but fair volumes still remained available in the May 8 week. Canadian plywood activity was slow this week, taking a pause during wet weather across the country and particularly in the flooded East. Pricing remains sideways. Particleboard producers reported little change in their marketplace. The relationship between supply and demand remained reasonably balanced, limiting discounts in the market. MDF sales remained strong. Western producers noted increased sales activity, in part due to moulding manufacturers moving their own production.

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