Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for May 26, 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: The SPF lumber market began the week with modest sales activity after improved demand helped firm up prices the week prior. A Canadian holiday played a role in the slower start. Little changed by week’s end in both the West and East, with sales sluggish and most prices ending lower. Buyers entered the Southern Pine lumber market in greater numbers to replenish inventories. The additional buying eroded excesses from mill inventories and firmed more prices as the week progressed. The turnaround was particularly evident in the West zone early and spread to the Central and East regions. From the opening gun, Coastal species producers looked to sell volumes below price levels established the prior week. Despite the discounts, buyers remained hesitant to purchase in a down market where pricing is still considered on the high side. Inland lumber producers report a week of decent trading activity, although some are trading more selectively than they have in past weeks, especially with regard to Fir-Larch. Downward pressure persisted in North American stud markets. While some prices did manage to hold, most items settled at lower levels. Buyers remained satisfied with purchasing only when necessary and volumes needed to fill near-term needs. Radiata Pine prices have been oddly stable, in view of the double-digit increases in Ponderosa Pine, which is tight, with no notable changes in Mldg&Btr or Shop. In boards, Ponderosa Pine Commons have been under some duress this spring, based on strong demand for such products as #3 and #4 Common, as some remanners have sought these items to supplement their Shop purchases. Idaho White Pine prices are holding in place, based on very thin production and lack of attractive tallies. Producers reported a less hectic pace to the Western Red Cedar market, prompting some to assume that buyers were pausing before purchasing more.

Panels: OSB activity remained dampened this week by regionally wet weather and fear of prices. Mills deflected offers which were sometimes $50 below established levels; however, block discounts were made to help move order files and keep a pulse going. Southern Pine plywood producers reported a decent week of sales, but it took widespread and significant rated sheathing discounts to get there. Good availability remained in the week of June 5. Buyers countered mills deeply, and in some instances, mills met buyers’ requests. Early sales in the Western Fir plywood market were dull but increased as one producer lowered CDX prices more sharply to move carload volumes. With significantly lower prices available, buyers often countered other producers with mixed results. Canadian Plywood activity was spotty most of this week and in a digestion mode from last week’s robust activity. However, some sources reported another surge in business late Thursday and into early Friday. Order files are mostly into June 12. Particleboard producers reported good sales to such buying sectors as laminators, distributors and OEMs. MDF sales were steady and prices firm.

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