Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for May 19, 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: Midweek sales activity picked up markedly in the SPF lumber market. Mills in both eastern and western Canada experienced stronger demand on Wednesday, enabling them to firm prices and move quotes moderately higher. Both producers and wholesalers reported a slower pace Thursday after Wednesday’s rally. Southern Pine pricing continued its downward trajectory as mills tried to sell current and past weeks’ production. Producers reported greater interest from buyers, often translating into improved sales volumes. However, mills had plenty to sell, thus the sustained pressure downward. Coastal species traders often described a market in which sales did not occur easily. This increased the downward pressure on prices, and those levels were often wide ranging, depending on a mill’s urgency to move an item. Inland lumber markets were quieter this week. The powerful downward pull of Canadian imports has kept the Hem-Fir market muted for several weeks, but especially in the last couple of weeks, as Canadian sellers searched for selling levels. In some species, particularly SPF, stud buyers were more open to purchasing greater stud volumes at discounted price levels. Radiata Pine is still sifting through the consequences of Chile’s fires, but reports do not indicate that major price changes have resulted yet. Ponderosa Pine industrial lumber is a relatively tight market. Demand for mouldings and millwork has pushed hard on available supplies all year, keeping price pressure on most key industrial items. Ponderosa Pine boards continue to be in fairly tight supply. The supply seems to be tighter than demand, which keeps consistent pressure on the prices of popular products. Some softness was apparent in Idaho White Pine pricing. Pricing in Western Red Cedar over the past couple of weeks has gained much more modestly than in prior weeks. Some of the more limited upward moves are due to buyers’ resistance to the persistent upward moves this year.

Panels: OSB markets were pretty much the same as last week, with slow activity and prices slipping. Buyers are waiting to see how much more pricing will slip and throwing around some offers far below established levels. Cracks continue to appear. The pace of Southern Pine plywood sales was sluggish. Mills reported sporadic activity, forcing them to lower rate sheathing prices. Most producers reported order files extending into the week of May 29, but quicker shipping volumes remained available. Western Fir plywood producers reported a slow beginning to the week after increased activity put prices on firmer footing the week prior. Any pickup at midweek was moderate, allowing mills to sell close to the week’s production. Order files into the week of May 29 were common. Canadian plywood activity had dampened recently, responding to crummy weather and high prices. However, this week markets took off and ran Wednesday afternoon after a few buyers stepped in. Order files moved out and pricing strengthened. MDF mills in the East reported good, steady sales. Past raw material shortages continued to force one western particleboard producer to catch up with orders.

For more on RISI, click here.