Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for July 28, 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: A more subdued sales pace forced SPF mills to lean more on strong order files extending into the latter weeks of August. Consequently, price changes lagged gains experienced in prior weeks. Caution prevailed, as buyers looked ahead to the duty-free gap period and the potential for lower prices. Sales at Southern Pine mills slowed enough to force mills into taking a second look at lower offers for some items. While 2x6 and 2x10 remained in good shape, other widths appeared in the market in greater volumes. Coastal species pricing continued to escalate. Buyers were well aware of prices suspended in the upper stratosphere, prompting them to hold off purchases whenever possible. Nevertheless, limited availability and the need for buyers to keep up with consumption remained primary price drivers. In Inland lumber, price levels of Fir-Larch dimension moved up solidly, encouraging uppers to react positively, as well. Hem-Fir was much flatter in tone, showing either unchanged prices or numbers that were slightly improved. Stud prices continued to grind higher, although demand was not as strong as in prior weeks. Momentum was driven by limited availability of some items and order files extending as far out as the latter half of August. Radiata Pine prices remain consistent with recent levels, although ample supplies are at hand for buyers. The situation in industrial Ponderosa Pine lumber has changed very little from directions set over the past several weeks. The Ponderosa Pine segment of the 4/4 board market, usually very stable, responded to market forces and moved up in both C&Btr and D Selects. Western Red Cedar buyers see an upcoming opening with the CVD-free gap taking place in roughly another month. Many expect that producers will be more free-wheeling with regard to prices without that added production cost hanging over them.

Panels: OSB markets went into a digestive mode this week, although there is still little inventory in the field. Run-ups in pricing week-over-week have made buyers very cautious. Prices continued their escalation this week, but with less vigor. Sales activity in the Southern Pine plywood market was “slow” to “so-so,” according to most producers. Most mills retained order files stretching no further than the week of August 14, with quicker shipping availability still accessible. Western Fir plywood traders reported a slower sales pace but managed to hold onto price levels – for the most part. Buyers stepped back after purchasing significant volumes in prior weeks to assess what they have on order and focus on selling those volumes. Yard inventories, however, are not excessive. Canadian plywood markets continue to be driven by wildfires in British Columbia; however, the tenor of activity is not as frenzied as during the previous two weeks. That said, buyers are chasing orders and there is very little wood to go around. Business was steady overall in both particleboard and MDF, with strong MDF sale reported in the East. Particleboard producers in both the East and West managed to maintain order files, prompting a few producers to report “stable” demand levels. 

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