Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for May 12, 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 the prior week’s uptick in buying, the SPF market slipped back into a sluggish pace. Efforts by mills to maintain quotes above levels buyers wanted to pay persisted. May futures sustained a level well below what mills quoted, generating more frustration and a greater desire among buyers for its expiration. Southern Pine mills again discounted to sell excesses, this week more aggressively than the last. Scattered items sold at deep discounts, particularly when the volume purchased was significant. Filling in inventory holes when necessary was the overriding strategy among buyers. While Coastal species mills tried to hold onto prior levels established in previous weeks, excesses popped up to place pressure on dry Doug Fir and Hem-Fir pricing. Inland lumber producers report a quieter market in recent trading. Modest discounting has taken place, especially in 2x8 #2&Btr in both Fir-Larch and Hem-Fir. Repercussions from the April 24 duty determination continued to influence markets, including studs. After mills raised prices sharply to cover CVD duties, the market, particularly in SPF, has been slow to find amicable price levels. The availability of Radiata Shop from New Zealand has not changed. No price changes were reported in Ponderosa Pine Mldg&Btr or Shop, even though this segment of the industry remains strong and quite active. In Ponderosa Pine boards, “Selects made a few changes,” for the first time in many months, according to traders. Selects are not heavily produced, so a slight increase in demand resulted in the changes. Ponderosa Pine Common boards continue to push forward, although much more sedately than the past several weeks. Some Idaho White Pine came to market. Some Western Red Cedar mills reported a slower sales pace. Several reasons were offered, including a Canadian market filled with cedar as Canadian producers have tried to steer as much volume away from a duty-seeking US as possible.

Panels: A few cracks formed in OSB markets this week in the midst of a stalemate involving buyers who don’t like the prices and producers reluctant to move on the numbers. Pervasive wet weather served to allow the pause in activity seen in most quarters. Discounted volumes of Southern Pine rated sheathing increased and price cuts grew deeper. Buyers refrained from purchasing whenever possible, sensing the potential for more price downside. The sales pace in the Western Fir plywood market started out slow and picked up energy. By Friday morning, when activity remained good, prices had firmed and quotes were raised on a few items. While buyers were more active, some questioned how much momentum was behind the uptick in sales. The Canadian plywood market became squirrelly this week with seemingly endless rain and flooding coast-to-coast, affecting the general mood among mills and buyers. Sales activity in both particleboard and MDF were “steady.” Pricing remained solid and producers managed to maintain order files. Still, no sign of any significant increase in demand appeared in either market.

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