Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Jan. 13, 2012

*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 showed little interest in purchasing SPF volumes prior to the expiration of January's futures contract on Friday. A March contract trading below January's was given much of the credit for slow trading. Buyers reported little desire among mills to ex-pit, even though mill order files were quickly eroding. Southern Pine lumber producers experienced what many deemed "good follow-through" from increased demand levels the week prior. As a result, dimension prices again increased by double digits. Buyers scoured the market for 2x12 #2, but tight supplies made that dimension difficult to source. Lumber traders in the Coastal market experienced a solid week of trading. Producers sold relatively strong volumes, while wholesalers managed to sell from positions at a good clip. Prices throughout both dry and green items rarely adjusted more than $5. Long lengths remained strong, prompting higher price levels. Hem-Fir/White Fir remained the bright spot in the Inland lumber market while Fir-Larch struggled to get traction. Limited Ponderosa Pine production helped keep prices firm in Selects and Commons. Mills with good selection were able to hold or, in some instances, move prices up slightly. Limited volumes of Idaho White Pine were available, and most consisted of scattered tallies. Prices were mostly unchanged. Eastern White Pine sales were light but steady, and prices were close to last week's levels. Sellers of Radiata Pine Mldg&Btr and Shop reported a quiet pace to the market, but prices remained at published levels. Availability of Shop was still tight. Western Red Cedar sales were slow yet steady, helped by continued mild winter weather throughout much of the United States and Canada. Prices held overall. Production ramped up to cover both orders and forecasted sales for the first quarter.

Panels: OSB producers reported a strong finish to the market, more in the West than the East. Availability at week's end was limited, as some mills went off the market. Order files were out as far as Feb. 6. Although not at the pace as the previous week, demand for Southern Pine plywood was strong enough to propel many rated sheathing prices $15 to $25 higher. Other increases exceeded that range by a wide margin. More producers moved order files into early February. Sales activity slowed in the Western Fir plywood market from the more frenetic pace a week earlier, although selling a week's worth of production was accomplished. Order files in the weeks of Jan. 23 and 30 were common. Sales in the Canadian plywood market were made at levels above and below the most recent published price. MDF and particleboard customers continued to replenish inventories at the beginning of the new year, seeing their own orders increase.