Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Nov. 16, 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: Several SPF lumber producers reported a slower pace early, but by Thursday, demand had improved, sending prices higher. Mill order files extended as far out as the week of December 17 for some items. This prompted buyers to look to secondaries for coverage. Southern Pine lumber sales slowed at mills, but prices continued to climb. Wholesalers carrying quicker shipping volumes than what mills could provide were called upon to cover prompt needs. Dry producers in the Coastal species lumber market sold enough volumes to keep prices, at the very least, firm. Significant, steady volumes sold by mills allowed them to maintain order files extending roughly two weeks. The market for Inland species lumber remained steady. Although some producers reported a slower pace this week than last, the slowness was attributed to a lack of available wood to sell rather than weakness in the market. Radiata Pine industrial lumber remains in short supply, particularly for Shop grades, and traders say they do not anticipate any increases in availability in the near future. Buyers of Ponderosa Pine kept their PO books in the desk drawer most of the time, having covered most of their November needs. Producers have made an effort to shift away from the production of Shop grades as much as possible. The one bright spot has been #3 Shop and P99. The market for Ponderosa Pine boards remained weak, with buyers only making purchases on fill in items that shipped quickly. Producers were open to slight counters in order to move buildups of certain items. Eastern White Pine producers reported continued steady business. They also indicated good re-ordering from their regular customers. Steady sales and firm prices were reported for both ESLP and Idaho White Pine. Much of the tone in the Western Red Cedar market was positive as the calendar moved closer to the new year. Sales for shipments yet this year picked up, as buyers ran low on stock.

Panels: Although the volume traded was lighter, OSB markets continued to show strength, and, in some cases, prices increased. Mill order files as far out as the week of December 10 kept control of the market in the hands of producers. Southern Pine plywood producers extended order files into the week of December 3. That lead time prompted them to move rated sheathing prices $5-10 higher. Most Sales activity in the Western Fir plywood market was described as "lackluster." Buyers picked off some prompt shipping volumes available from mills, but there was no momentum to the market or prices in either direction. The Canadian plywood market seems to have found a trading level where most everyone is content. Producers are touting order files into the week of December 10. Producers and secondary suppliers agreed the sales pace in particleboard and MDF was steady or a touch slower. Prices of both particleboard and MDF held.

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