Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for July 21, 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 rate of price escalation in SPF lumber slowed from the prior week as the immediate impact from British Columbia fires lessened. Strong order files stretching in some instances out into the week of August 21 and solid demand in a market where availability is tight kept upward pressure on prices. The pace of sales experienced the week prior in the Southern Pine lumber market subsided, but decent demand and order files kept upward pressure on some items. Producers frequently noted more strength in 2x6 and 2x10 while other widths lagged. Coastal species pricing gained strongly as availability remained tight and, in several instances, grew even more limited. Strong and steady sales activity allowed mills to raise their prices incrementally. Reports from yards in California depicted brisk sales. Inland lumber price gains in both Fir-Larch and Hem-Fir in most grades defined perhaps the strongest week of the year for some producers. Behind this action is the oft-repeated industry reaction to Canadian tariffs, but more immediately the cause is fires in British Columbia. Stud demand across all species remained strong, although not as feverish as the week prior. Consequently, prices continued to gain, with most running $5-15 above the prior week’s levels. Radiata Pine Shop is more easily available than it has been for some time, but prices are not discounting. Mldg&Btr is also not as tight, but publicized prices are unchanged. Ponderosa Pine industrial lumber has quieted over the last couple of weeks, entering almost a holiday phase, compared to much of the spring and summer. Although demand for certain Ponderosa Pine items remains good, the overall tone of the market has slacked off a bit. Selects remain very stable and consistent, a fairly balanced market. The sales pace at Western Red Cedar mills was mixed, and volumes sold were generally moderate. Buyers filled-in inventories with mixes.

Panels: Propelled by ongoing fires in British Columbia, OSB prices took wing this week as Western Canadian producers remained OTM. The situation created opportunities for producers in Eastern Canada, the Southeast, and the Southwest regions to serve western markets who typically depend on manufacturers to the north. Southern Pine plywood producers rated sales “decent” to “good.” While extending order files out into the weeks of July 31 and August 7, prices remained firm. Some rated sheathing quotes were raised, and sales were recorded at the slightly higher levels. Western Fir plywood producers reported moderate slowing in CDX demand, but prices continued to make solid gains. Order files extended out into the middle of August, underpinned by several reports of strong activity in the field. Demand out of Canada remained strong. The Canadian plywood picture is a mess, with fires raging in British Columbia. Log issues are at the front of everyone’s mind, since most harvests are shut down. Pricing passed a record level midweek. Particleboard producers continued to report a lackadaisical summertime market. Others managed to sell good volumes, extending their order files well into August. MDF imports remained a considerable driver in the domestic marketplace.

For more on RISI, click here.