Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Sept. 21, 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: In both eastern and western Canada, SPF producers were forced to lower quotes to remain somewhere near market levels. Producers in the East seemed more aggressive, while producers in the West lowered quotes more modestly and then accepted counters in some instances. Weak pricing persisted in the Southern Pine lumber market. Buyers matched purchases with sales volumes in an effort to lower inventory costs. Treaters remained less active, many trying to draw inventories down prior to their year end. Coastal species lumber producers entered the market more aggressively, seeking to move off larger volumes of stock. Mills were able to sell enough volumes to establish price floors and even raise quotes on a few items, depending on the producer. The market for Inland species lumber remained weak. As stock on the ground was cleaned up, producers were less likely to entertain counters, choosing instead to sit the market out for the time being. Eastern White Pine order files improved and mills were out close to 2 weeks on shipments. Sales activity for ESLP boards was unchanged. Producers reported the market was steady and firm. A slight improvement in the Ponderosa Pine board market gave producers a glimmer of hope. Sales of #2, particularly 1x6, were reportedly more active, and producers were able to bump prices higher. Producers are able to sell Ponderosa Pine 5/4 and 6/4 Mldg&Btr at quoted levels, but #2 Shop remained a struggle to move. Announced reductions in availability during the next few months helped keep Radiata Pine Mldg&Btr prices firm and unchanged from last week's levels. Western Red Cedar buyers plugged inventory holes with an eye toward the upcoming winter months, but struggled at times to find the right mix. Mill order files stretched from the first week of October out into mid October.

Panels: The overall tone in OSB markets was one of light sales and vulnerable prices. Depending on the region, discounts ranged from $5-20. The determining factor often was mill order files. Sales activity in the Southern Pine plywood market for rated sheathing was slow, eroding mill order files and pushing prices lower. Buyers perceived an opportunity for deals the week of 9/24. Mill lead times were in the week of October 1 or sooner. Western Fir plywood mills were willing to accept discounts of $20-25 for CDX items, but lower prices did not draw many more buyers into the market. Sanded panel and underlayment prices were firm. Several factors have placed downward influence on Canadian plywood markets. Sales were very light at major mills, as buyers turned to other producers who could ship sooner and discounted to get the business. Particleboard sales and prices remained flat. Brisk MDF sales continued to limit availability and influence very solid price levels.