Market Recap: RISI Crow's Construction Materials Cost Index


A price index of lumber and panels used in actual construction for April 19, 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 placed more downward price pressure on SPF lumber. Activity increased Tuesday after traders heard reports of additional sales to Asia, but short covering and other buying in wake of the news quieted by Wednesday morning. All dimensions across all Southern Pine lumber zones were prone to discounts, with 2x8 and 2x10 #2 considered the weakest items. Resistance to high price levels, weather conditions and buyers' refusal to purchase in a down market all contributed to price weakness. Needing to sell production, Coastal species lumber producers came to market offering double-digit discounts. Buyers often offered well below those discounted levels. Wholesalers liquidating positions also contributed to market weakness. The Inland species lumber market started the week on a quieter note. As the week progressed, the lack of sales began to put downward pressure on prices, and producers became more receptive to offers. Sales of Radiata Pine Shop were non-existent by virtue of nothing being offered by producers. Sales activity continued to improve for Ponderosa Pine Moulding and Shop grades. Ponderosa Pine board producers held prices in spite of lighter sales volumes. Buyers indicated they had an adequate supply of wood for the time being. Weather was blamed for slower ESLP sales. Eastern White Pine producers reported steady business but little change in pricing. Western Red Cedar producers reported little in the way of increased sales activity, but sales were again enough to limit mill inventories to "workable" levels. Most producers preferred to hold prices until demand in the field improved.

Panels: Weakness in the OSB market was widespread. Offers and discounts were the rule of the day, as producers tried to find a trading level allowing them to build back their order files. Mill sales activity in the Southern Pine plywood market was mixed, although most producers reported a less enthusiastic tone. In part due to weakness in other markets such as OSB and lumber, wholesalers and other buyers sensed the potential for vulnerability in plywood. Western Fir plywood mills lowered some prices moderately to keep volumes flowing into the distribution chain. Other prices held onto the prior week's levels. Producers continued to report order files out only into the week of April 29. Some Canadian plywood distributors said their inventories were adequate for the volumes shipped out of their yards, citing bad weather as the reason for lighter than anticipated business. Western particleboard sales continued to improve, largely due to a tightening of supply in the Southeast. Higher MDF prices and a lack of availability are allowing more imports to enter the United States.

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