Market Recap: RISI Crow's Construction Materials Cost Index
A price index of lumber and panels used in actual construction for Aug. 25, 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 activity level in SPF picked up late Wednesday and flowed into Thursday as the date for the CVD-free period approached. After running inventories low while waiting out price declines, buyers came back in, shopping the market for major volumes in some instances. Other buyers continued to simply fill in holes and check on shipments, maintaining low inventory levels.
Southern Pine pricing continued to trickle down. Traders noted minimal change from prior weeks. Lower quotes appeared in a wide range of items and producers discounted deeper where excesses appeared. Buyers sensed plenty of availability and purchased accordingly.
Downward price pressure persisted in Coastal species. Production outpaced demand to varying degrees, depending on the items. Green Doug Fir discounts were considerably deeper than dry.
Inland lumber was split. Fir-Larch continues to ride the force of strong demand to firmer prices. Hem-Fir, on the other hand, shows ongoing weakness, especially in the narrows of #2&Btr lumber. Across all markets and items, stud prices remained some of the weakest.
Mills continued to discount, trying to sell volumes into a market where interest among buyers is limited. Nevertheless, traders noted that some prices have now reached levels where buyers can feel more comfortable.
Radiata Pine Mldg&Btr shows some potential market weakness because more pruned logs are being processed.
Ponderosa Pine industrial lumber shows stability in Mldg&Btr but weakness in all low grades of Shop and Commons. Ponderosa Pine 4/4 Selects remain very stable, with no changes in either C&Btr or D grades. Ponderosa Pine #3 Common has been softening over the last few weeks.
The sales pace in Western Red Cedar remained pedestrian as the market awaited the CVD-free gap period and its ramifications. Producers reported discounting a few items, but they were not widespread and did not influence market prices negatively.
Panels
What began as “cracks” last week in the OSB market opened into some holes in price levels this week in western zones. Buyers have been uncomfortable with high OSB prices for weeks, and have been waiting out the market as mills tried to stand firm.
Southern Pine plywood sales activity improved in the latter half of the week. Early-week discounts were sometimes deep, as producers tried to move excesses or push order files into September. By Thursday, quotes steadied and even bumped higher.
Western Fir plywood production continued to outpace demand, forcing mills to lower prices once again. Low inventories out in the field kept buyers in the market, but purchases often only covered immediate needs and little else.
Canadian plywood activity was reported steady this week, with buyers trying to stand mills off. Some limited discounting was reported but relegated to “special deals.” Low inventories underpin the market. A source said the market consisted of “a lot of chasing and changing” orders.
MDF producers generally reported healthy order files, although the perception that business could be better was common.
Producers in the West reported some weakness in particleboard, with the week’s orders shy of production levels. Hopes for an uptick in fall demand were prevalent.
For more on RISI, click here.