Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for August 4, 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: SPF lumber sales to US buyers were modest while Canadian buyers participated at a decent rate. While expressing confusion and caution with regard to how to approach the market, buyers do expect prices to drop in September. Consequently, they showed limited interest in purchasing anything for shipment in September. Southern Pine lumber mills tried to hang onto quotes but a slower sales pace and growing availability forced them to discount in several instances. Price cuts were most prevalent in the West zone, where varying amounts of discounting appeared in all dimensions of #2. Price increases in Coastal species were a bit tamer than in prior weeks, as overall demand slowed a bit. Producers quickly pointed out that supply and demand were either balanced or still light on the supply side. Mill lists remained limited, offsetting the moderate downturn in buying. Inland lumber producers reported that “action picked up” as the week progressed. Major attention continued to focus on Fir-Larch, but Hem-Fir did not lag behind in either inquiry or prices. Stud demand slowed, reducing upward price pressure and even prompting some discounts in a few items. Radiata Pine continues to be very stable in price, although major users report that they are being offered more Shop than they need from both Chile and New Zealand. Ponderosa Pine Mldg&Btr remains unchanged in recent trading, but all 5/4 Shop shows a $10 gain, except for #3 Shop, which moved up $5 in this week’s activity. In Ponderosa boards, Inland Selects remain firm now, but some of the Commons have begun to show some downward stress. Most Western Red Cedar producers remained somewhat adamant about trying to hold up price levels through the extent of any duty-free period. Buyers continued to hold out as much as possible, looking for a downturn in prices from producers willing to give up some of the price gains made earlier this year.

Panels: With prices at their current elevated levels, OSB buyers are increasingly cautious and continue buying hand-to-mouth. Patterns are driven by a reluctance to be holding wood when, or if, prices begin to deteriorate. Order files range from the week of August 21 into mid-September. Southern Pine plywood mill sales remained lackluster. Contract orders for August helped fill in those order files.  While producers often held rated sheathing quotes, they were not necessarily firm. Western Fir plywood mills did little in the way of adjusting sheathing quotes, although some discounts in CDX used to bolster order files were reported. Sales activity was not robust, but lead times extending into the week of August 21 allowed producers to hold most quotes. Canadian plywood activity is wildfire-driven, as it has been since early July. Markets took a bit of a breather with many players on end-of-summer vacations and the Quebec construction holiday winding up its last week. Particleboard and MDF producers often reported lackluster to steady sales activity and blamed the level of buying on the season. Mills often reported order files in the latter half of August.

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