Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Jan. 18, 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: Slow trading in the SPF lumber market kept mill order files from moving more fully into the first days of February. With availability more plentiful for some items, including 2x4 #2&Btr, in the week of Jan. 21, traders began to wonder who would blink first -- buyers or mills. Weather was a factor in the Southern Pine lumber market, influencing both production and consumption. Major producers reported having modest inventories for this time of the year. Mills still carried order files. The sales pace in Coastal species lumber slowed. Mills continued to carry decent order files, which helped buoy prices. Rising log prices remained a concern. Inland species dimension lumber sales activity was slower, partly because of buyers absorbing previous purchases into their systems and a lack of products for producers to sell. Those producers that had good tallies of Fir-Larch narrows were able to write business at published levels or higher. A quiet market continues to exist in Ponderosa Pine industrials. Volumes sold were light, and prices were mostly firm but unchanged. Ponderosa Pine board producers reported an active week of sales for low grades for both domestic usage and export markets. Light inventories at Inland mills kept buyers' choices to a minimum. Western Red Cedar sales remained steady. Producers filled in order files for the first quarter and some extended files into April and May.

Panels: Activity in OSB markets was muted in most regions. Producers relied on mill order files out to the middle of February in some instances to keep list prices firm. Secondaries sold some volumes slightly below replacement costs. Sales activity at Southern Pine plywood mills was slower, but producers were still able to fill in order files extending into the front half of February. Quieter trading left prices at or very near prior levels. Sales activity in the Western Fir plywood market was quiet, but mill order files contributed to some higher quotes. Mill order files extended as far out as Feb. 11, but some availability continued to exist for the week of Jan. 21. Order files continued to be the strength of major Canadian plywood producers, as sales volumes remained light. Activity for off-grades slowed and prices were softer. Selects remained strong with order files out to late February. Eastern markets were quiet. Buyers in the West looked towards next week's trade show for a direction in the market. Particleboard sales activity in both the East and West was steady. Producers kept order files at a somewhat comfortable distance, while buyers reported having little difficulty covering needs in a timely manner. Moulding manufacturers continued to purchase strong volumes of MDF, absorbing any extra volumes they could find.

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