Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Jan. 4, 2013

*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: SPF trading was sluggish. Buyers instead tracked orders and shipments, needing deliveries. The reasons given by traders for the slower sales activity were numerous, but most centered on futures at a discount to the cash market. Southern Pine lumber prices continued to push higher. Mills maintained order files out 2-3 weeks, which was the primary driver of rising prices. Significant inquires making their way through the market added to the bullish approach by producers. The Coastal species lumber market remained strong, with mill lead times for a few items extended into early February. Producers reported moderate sales, as buyers continued to experience significant takeaway activity. Market activity for Inland species lumber was slower. Limited availability left buyers searching for coverage. Mills reported receiving orders from outside their normal shipping regions. Sales of Radiata Pine Mldg&Btr were steady and sometimes called brisk. Producers kept order files in close, in spite of offers to book further out. Buyers of Ponderosa Pine Moulding and Shop were still out of their offices or did not have a need to buy anything. The Ponderosa Pine board market ended the first week of the new year quiet. Activity was light due to the shortened week and some participants still being out on holiday vacation. Idaho White Pine sales were light, as were those for ESLP. Eastern White Pine sales activity was modest. Shipments of previously transacted orders outpaced moderate sales activity in the Western Red Cedar market. Those orders, generating mill order files extending through the first quarter and into the second, left mill inventories thin.

Panels: Carryover from last week's active OSB market was light. Buyers who were in their offices and looking for OSB had difficulty finding producers who would quote. Wholesalers reported steady sales of previously purchased loads Buyers remained active in the Southern Pine plywood market, which was especially noteworthy after coming off a long holiday weekend into a short week. Availability was generally in the week of January 28 or sooner. Mill sales in the Western Fir plywood market were lackluster, due largely to few sales to eastern customers. Prices, however, remained solid or sustained a slight upward trajectory. The shortened holiday weeks did little to take the momentum out of the Canadian plywood market. Producers reported light but steady sales. Sales out of distribution were also steady. Several particleboard producers noted they were pleasantly surprised at how well their markets held up during the holidays. Moulding manufacturers continued to accept their allotted volumes, helping to keep MDF order files at a distance.

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