RISI Crow's Market Recap
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: SPF producers reported moderately improved sales activity. Gains in futures prompted some buyers to purchase in the cash market if necessary, including wholesalers covering shorts. Buyers remained cautious, some perceiving the potential for more downside risk prior to year-end. Traders watched for any strike news. Production continued to outpace demand in the Southern Pine market, with no word of production cutbacks due to market conditions. A short-lived minor uptick in prices in July was the only increase for most dimensions in what is now 19 weeks. Mills sold off significant volumes of 2x6 in both #1 and #2, largely because those prices are at investment levels. As in lumber markets overall, Coastal species had a slightly “better tone” to it. Much of the improvement was centered on green Doug Fir, where trading levels developed and pricing firmed by the week’s end. Dry pricing in both Doug Fir and Hem-Fir remained soft, but sales improved and discounts were more limited. Inland species endured a “modest week” according to most reports. Both the tone of the market and sales activity were a little improved, however, and a good bit of talk about “bottoming” was heard. Even so, in both #2&Btr and uppers, prices showed further slippage. Stud pricing continued to come off highs established in the early summer, but discounts were less than in prior weeks. Activity improved overall – moderately – allowing mills to sell greater volumes. Futures gains throughout much of the week instilled a little confidence. Industrial lumber has lost a good bit of its year-long stability. Significant changes have affected both Mld&Btr and Shop; some of these changes have altered prices. Ponderosa Pine “Selects are stronger,” showing price increases in both C&Btr and D. Commons showed some fluctuations, especially in #3 and #4 Common, both of which were softer. Western Red Cedar producers with a large part of their mix consisting of timbers generally reported better sales than others. Wide widths also sold with greater regularity than narrows. Decking pricing remained weak and demand for those items limited.
A price index of lumber and panels used in actual construction for Oct. 19, 2018.
Western: regional species perimeter foundation
Southern: regional species slab construction
Panels: Region-to-region, OSB markets were mixed this week; however, most sources felt that a bottom may have been reached or is near, and buyers stepped in for limited volumes. Numbers were low enough that some investment buying was done. Southern Pine plywood demand continued to lag production. Yards focused on selling inventory while purchasing light replenishment volumes. Orders for shipment in the week of October 29 were placed, but availability remained in the week of October 22. Some producers described a Western Fir plywood market woefully lacking demand. Others reported various degrees of improvement over prior weeks. Nevertheless, deep discounts were used to sell carload volumes. The auction market generated a broad range of sales prices. Canadian plywood activity picked up this week and took on a firmer tone. Discounting done early in the week shrank by Friday and order files moved out. Two producers are OTM, and as a result, less cash wood is available. A few particleboard and MDF producers reported the frequency of orders not as stellar as prior weeks. After catching up with needs over the past few weeks, some customers held back purchases.
Lumber: SPF producers reported moderately improved sales activity. Gains in futures prompted some buyers to purchase in the cash market if necessary, including wholesalers covering shorts. Buyers remained cautious, some perceiving the potential for more downside risk prior to year-end. Traders watched for any strike news. Production continued to outpace demand in the Southern Pine market, with no word of production cutbacks due to market conditions. A short-lived minor uptick in prices in July was the only increase for most dimensions in what is now 19 weeks. Mills sold off significant volumes of 2x6 in both #1 and #2, largely because those prices are at investment levels. As in lumber markets overall, Coastal species had a slightly “better tone” to it. Much of the improvement was centered on green Doug Fir, where trading levels developed and pricing firmed by the week’s end. Dry pricing in both Doug Fir and Hem-Fir remained soft, but sales improved and discounts were more limited. Inland species endured a “modest week” according to most reports. Both the tone of the market and sales activity were a little improved, however, and a good bit of talk about “bottoming” was heard. Even so, in both #2&Btr and uppers, prices showed further slippage. Stud pricing continued to come off highs established in the early summer, but discounts were less than in prior weeks. Activity improved overall – moderately – allowing mills to sell greater volumes. Futures gains throughout much of the week instilled a little confidence. Industrial lumber has lost a good bit of its year-long stability. Significant changes have affected both Mld&Btr and Shop; some of these changes have altered prices. Ponderosa Pine “Selects are stronger,” showing price increases in both C&Btr and D. Commons showed some fluctuations, especially in #3 and #4 Common, both of which were softer. Western Red Cedar producers with a large part of their mix consisting of timbers generally reported better sales than others. Wide widths also sold with greater regularity than narrows. Decking pricing remained weak and demand for those items limited.
A price index of lumber and panels used in actual construction for Oct. 19, 2018.
Western: regional species perimeter foundation
Southern: regional species slab construction
Panels: Region-to-region, OSB markets were mixed this week; however, most sources felt that a bottom may have been reached or is near, and buyers stepped in for limited volumes. Numbers were low enough that some investment buying was done. Southern Pine plywood demand continued to lag production. Yards focused on selling inventory while purchasing light replenishment volumes. Orders for shipment in the week of October 29 were placed, but availability remained in the week of October 22. Some producers described a Western Fir plywood market woefully lacking demand. Others reported various degrees of improvement over prior weeks. Nevertheless, deep discounts were used to sell carload volumes. The auction market generated a broad range of sales prices. Canadian plywood activity picked up this week and took on a firmer tone. Discounting done early in the week shrank by Friday and order files moved out. Two producers are OTM, and as a result, less cash wood is available. A few particleboard and MDF producers reported the frequency of orders not as stellar as prior weeks. After catching up with needs over the past few weeks, some customers held back purchases.