Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Feb. 8, 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 prices increased early and continued to rise throughout the week. Distributors replenished inventories and wholesalers purchased significant speculative volumes. Up-limit moves in futures early delivered more confidence to the cash market. A short-lived downturn in Southern Pine lumber prices came to a halt last Friday and continued throughout this week. Tuesday was a huge sales day for mills, with some setting records for volumes sold. Treaters purchased multiple carload volumes and continued to shop the market late in the week. Coastal species lumber producers sold strong volumes, allowing them to push prices often beyond multi-year highs established in January. Needing to supplement inventories, buyers gave up trying to wait for prices to drop further. The Inland species lumber market continued to rebound from last week's momentary softness. Producers reported good activity in Hem-Fir narrows. Radiata Pine prices were firm and offerings were limited, especially in Shop grades. Although Ponderosa Pine Moulding and Shop markets appeared a little more active, the general opinion was that the movement was as much supply driven as it was improved demand. Prices were firm but unchanged. Ponderosa Pine board producers reported a "substantially better market" for Selects and Commons than they have seen in recent times. Producers also reported steady sales of Idaho White Pine and ESLP. Eastern White Pine producers reported firm pricing and good demand for all widths of Standard and Industrial grades. With inventories at Western Red Cedar mills tight and buyers still willing to participate at current price levels, producers continued to contemplate raising prices further.

Panels: OSB markets started the week with a quiet but firm tone. On Wednesday that all changed, as market activity picked up strongly. So much, in fact, the resurgence in business caught many traders off guard. Wholesalers and distributors purchased large volumes of Southern Pine plywood beginning Wednesday, helping drive prices higher. Most producers extended order files to at least the week of February 25. Strong sales throughout the week in the Western Fir plywood market strengthened mill order files and placed upward pressure on a number of prices. Yards from several regions participated in buying, including the Northeast. Canadian plywood activity saw order files from the major producers out to the week of March 11 or March 18, depending on the item. Quotes and sales of plus 2 or 3 points for cash wood occurred, while orders were taken early in the week at less 2 points. Particleboard sales remained steady, leaving no room for any upward price movement. MDF continued its strong showing. Customers remained on allocation. Moulding manufacturers eagerly accepted their allotted volumes and searched for any other they might find.

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