Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for June 9, 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: Buyers began to step into the SPF market in greater numbers Wednesday morning after western mills floated prices for 2x4 #2&Btr in the $350s. Mills pressed quotes above the $360 level by Thursday and as high as $370. However, many prices ended lower after early discounting. Discounts in Southern Pine grew a little deeper and more prevalent as the week progressed. Still, much of the discounting remained moderate, often no more than $5. Rains in the South again constricted consumption in that region. Traders consistently mentioned the “horrendous” trucking situation. Coastal species mills managed to maintain some price levels while others remained soft and dropped early. Buyers often perceived the market to be on better footing, especially those participating in green Doug Fir. In the Inland region, the relative abundance of Hem-Fir logs to process has kept some pressure on the species, compounded by the fact that Canadian lumber is more abundant this year, creating a difficult market. Overall, stud pricing continued to gradually strengthen this week after show some signs of stabilization the week prior. SPF prices established firmer footing, with any discounting much more moderate than in prior weeks. Radiata Pine and Ponderosa Pine industrial lumber is having a difficult time generating further upward movement in prices because of some of the gaps that exist between the two major species involved. Despite the lack of changes in 4/4 Ponderosa Pine boards, the demand and current supply create a very steady marketing situation. The #4 Common still represents one of the strong segments of the board market, although price increases have paused in recent trading. he level of demand for Western Red Cedar remained lower than earlier this spring. A few producers voiced concerns over the rapid run up in prices this spring.

Panels: After OSB markets firmed last week, sources wondered whether this week would perk up. It did. Order files moved out mostly into July 3-10, though some wood is available sooner in the Southeast and Southwest. Some big blocks were sold, with buyers filling voids but still not taking aggressive positions. Activity in the Southern Pine market improved as buyers took inquiries and purchases to another level. Moderately improved sales reduced the amount of rated sheathing discounts and prompted mills to report few price changes and order files into the weeks of June 19 and 26. Western Fir plywood producers experienced better sales activity, but in some instances, mills accepted significantly lower prices to sell the volumes they needed to move. Other producers held more firmly to quotes and even raising them by the week’s end. Order files in the weeks of June 19 and 26 were typical. Canadian plywood took off and ran this week with a flurry of buying activity. The week started slow, and mills were resolute on ask levels. But the cycle of midweek discounting did not happen, and buyers appeared in droves by Wednesday afternoon. Particleboard and MDF producers reported steady sales overall. Mills continued to produce at strong rates.

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