Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Aug. 17, 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: Strong buying, particularly at midweek, sent SPF lumber prices higher. Mill order files extended into early September. By Thursday, sales at western mills slowed, as losses in September's futures contract pushed it slightly below cash. Southern Pine dimension lumber prices were mixed. Retailers looking for specified tallies still had some difficulty finding the right mixes at mills. Often, they turned to distributors to cover needs. Prices for Coastal species remained solid as a rock, as buyers continued to absorb available production. Despite escalating green Doug Fir prices and their narrower gaps with dry prices, mills continued to keep production in line with demand. When Inland species lumber buyers went looking for wood, they found a limited selection being offered by producers. Eastern White Pine board producers continued to enjoy a firm market, with sales to both offshore and domestic buyers. Upper grades of Sugar Pine boards were not isolated from downward price pressure, in spite of light inventory levels at the mills. Weakness persisted in the Ponderosa Pine boards market. The lack of business was most notable in the upper grades, where producers were open to counters. The market for the upper grades of Ponderosa Pine Shop remained in the doldrums. Radiata Pine activity was similar to Ponderosa Pine. Sales of Mldg&Btr were low, as offerings were light. Activity for Shop grades was almost non-existent. Blanks were in short supply, but inquiry levels were also light. Any pressure on Western Red Cedar prices in either direction was minimal, although producers did admit to carrying more volumes of some items than were carried earlier this summer. Buyers, wanting to keep inventories in line with takeaways, purchased hand-to-mouth, highly specified orders.

Panels: OSB sales volumes reduced as order files extended into late September and beyond. Sales out of distribution remained active as dealers turned to the DCs for quicker shipment times. Southern Pine rated sheathing prices edged higher, now increasing for five consecutive weeks. Producers reported a moderate yet "good" week of sales activity. Order files moved solidly into the weeks of September 3 and 10. Tight supplies continued to propel Western Fir plywood prices higher. With mill order files out to mid September, buyers turned to wholesalers for quicker shipping volumes. Canadian plywood producers spent a lot of their time following up on requests from customers for status updates on previously made purchases. Mill order files to the week of September 17 or further kept many buyers on the sidelines. MDF buyers clearly need more product than what the market is currently producing. Particleboard prices were stable.

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