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RISI Crow's Market Recap

1/15/2019
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 pace of SPF trading picked up as early as late Tuesday, providing a notable uptick in business Wednesday and into Thursday. Traders often noted it was simply time for buyers to replenish inventories following the holidays. As of Thursday, prices firmed, and producers managed to raise quotes a few dollars while trying to extend order files. Although the market garnered little momentum, Southern Pine lumber sales improved moderately for some producers. Discounting, however, remained common and order files modest. This is despite holiday downtime and interruptions in production due to log availability. Drier weather in much of the Southeast improved log deliveries to some mills. Recent wet weather also kept job site activity limited. Coastal species sales remained lackluster. A lack of interest from California buyers kept a lid on green Doug fir buying. Dry prices held up well. The Inland lumber market was quieter than most producers expected, but no anxiety was reported. Prices of most items have lifted slightly over the last three weeks, but it appears that some of the price gains are an attempt to kick start a sullen mule. Following a sluggish beginning to the new year, SPF stud sales gathered strength during the first full week of business. Buyers entered the market in greater numbers to replenish, firming prices and moving them higher in many instances. Particularly of interest among buyers was 2x4 9’. Among Ponderosa Pine industrial items, neither Mldg&Btr nor Shop is strong. However, Mldg&Btr is less problematic than Shop. As with #3 and, to a lesser extent #2 Common boards, mills have developed accumulations that they need to lighten. Ponderosa Pine 4/4 Selects were reported to be stable in price and not an issue in the marketplace. Commons, however, were reported to have several seasonal problems. As one source reported, Common boards show “lots of excesses.” Some Western Red Cedar producers reported a notable increase in activity, although at an unremarkable pace. Others described a lackluster market, little different from the December pace.

A price index of lumber and panels used in actual construction for Jan. 11, 2019.

Western: regional species perimeter foundation
Southern: regional species slab construction



Panels: OSB markets navigated another week of the doldrums. Although demand typically slows with winter weather, sources were surprised that very few buyers took on volume with the opening of the new year. Prices were broadly viewed as being investment level, but dealers showed little interest. Southern Pine plywood sales improved during the first full week of the year. Traders attributed some of the increased activity to buyers “getting back into the swing of things.” Replenishment buying among yards after running inventories thin at year’s end also contributed to increased trading activity. Trading activity in the Western Fir plywood market remained solid. Producers reported significant amounts of inquiries with varying degrees of success turning those queries into orders. The price spreads between truckload and carload sales have narrowed considerably. After a slow start to the week, Canadian plywood markets woke up Thursday as buyers participated ahead of next week’s WRLA meeting, which is considered a buying event. Order files moved out and pricing inched up. Much of the particleboard market continued to transition from the holiday weeks into the new year, marking the period until market players expect activity to pick up. MDF sales were sluggish. Some block volumes sold at discounts.
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