Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for June 22, 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: The stalemate between buyers and sellers in the SPF market came to a close, as mills were forced to make some downward price adjustments. The continuing large gap between futures and cash gave buyers reason to remain hesitant. Some EFP trading was apparent. Southern Pine lumber mills were again forced to lower prices to compete with abundant supplies in the market. Overall, producers were more aggressive in their search for buyers than in previous weeks. Coastal species lumber producers lowered dimension prices early on some items, and buyers responded Tuesday by increasing their purchases. By the week's end, several prices were not able to regain prior levels. Inland species lumber was discounted early in the week, more for narrows than wides. By week's end, prices had firmed and closed near last week's closing numbers. Eastern White Pine board producers continued to push to fill orders already on the books as well as writing new business. Competition from other species held prices in check. The market for Ponderosa Pine boards was quiet; as buyers looked for fill-in tallies but many times only found limited offerings from producers. A build up of inventory in Ponderosa Pine #2&Btr Shop lumber had producers looking for orders and willing to entertain counters. Buyers of Radiata Pine are voicing concerns over late shipments. Some report orders that are 6 weeks late. Western Red Cedar sales were steady, but mills hesitated to push prices higher. Anything that might give up market share, including higher prices, was a chief concern among mills. More focus was placed on shipping as much wood as possible prior to the end of the second quarter.

Panels: OSB producers saw light sales activity but showed little concern for downside risk. Order files into the week of July 16 helped bolster their confidence. Prices in all regions were a mix of firm or slightly higher numbers. Trading activity in the Southern Pine plywood market was moderate. Thick rated sheathing panel prices were again negotiable. Buyers looked for the quickest shipping volumes, trying to fill inventory holes. Western Fir plywood producers reported slower sales, but the market remained on strong footing. Western buyers, especially those in California, often found lower prices in the West zone of the Southern Pine market to their liking. Canadian plywood producers reported a quiet market. Order files out to the end of July kept control firmly in the hands of producers. Distributers reported brisk business out of warehouse, as dealers made full truckload and LTL purchases to fill their inventories. While some particleboard and MDF producers saw no decline in demand, others noticed customers, in the words of one producer, "Taking a breath." MDF sales were not as brisk, but volumes purchased were still solid.

For more on RISI, click here.