Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for March 15, 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 mills sold steady volumes and nudged prices a few dollars higher, as buyers purchased significant volumes for shipment in the first week of April. Wholesalers sold volumes readily at price levels at or near replacement costs. Southern Pine dimension lumber prices once again tilted upward after an uptick in buying late the week prior and varying degrees of follow through this week. The perception that treaters still needed to purchase spring needs remained in play. Coastal species lumber prices moved higher, as price resistance from buyers continued to give way to needs. A lack of availability; slow shipments, particularly out of Canada; gains in futures and persistent demand all contributed to higher pricing. Inland species lumber producers continued to control the market with strong order files and steady demand. Mill order files out beyond two weeks prompted buyers to look for quicker shipments from secondaries. Supplies of Radiata Pine remained tight, especially Shop lumber. The majority of reported sales were contract or program sales. While sales volumes for Ponderosa Pine Mldg&Btr were good, they were not enough to change prices. The Ponderosa Pine board market remained in the hands of producers. Mill order files out to mid-April in some cases had buyers scrambling to cover more immediate needs. Idaho White Pine Standard sold well, although supplies were limited. Eastern White Pine producers reported good sales for Standard and improved sales for Premium. Western Red Cedar buyers were cautious and awaited the time when greater consumption levels are expected to erode those purchases both in inventory and not yet delivered. Weather was to blame for a lack of takeaway at some yards.

Panels: OSB markets saw the lion's share of business transacted at the secondary level. Producers were able to keep prices at their lists for the most part. Some minor discounting was reported in a few regions. Southern Pine plywood buyers purchased strong volumes, sending mill prices moderately higher. High prices generated conservative purchasing, but persistently higher consumption levels forced buyers back into the market at whatever price. Sales at the end of the previous week, described by one producer as "screaming," were enough to allow Western Fir plywood mills to firm up price levels. Lead times most commonly extended into early April. Canadian plywood producers reported a quiet week of sales. Those with order files were content to keep prices close to published levels. Others were more open to looking at offers. Eastern particleboard mills continued to sell more volume than what was produced, while western producers experienced more of a struggle to move volumes. MDF sales remained solid.

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