Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for May 3, 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: Trading chugged along at a modest pace, leaving SPF lumber again susceptible to deteriorating prices. Buyers noted that some mills appeared to have cleaned up their lists from sales the prior week while others continued to look for orders more aggressively. Limited participation from buyers in the Southern Pine lumber market left prices weak once again. Buyers tended to fill only their most pressing needs with volumes available for quick shipment. Demand remained too light to slow the downward momentum found in Coastal species lumber pricing. Buyers had the ability to stand firmly on the sidelines while producers and secondaries with unsold positions competed for sales at lower price levels. Inland producers saw little enough action to reduce their tendencies to discount, leaving most of the heavy competition to distributors and wholesalers who had wood to move. Radiata Pine is available in both 5/4 and 6/4 Mldg&Btr and Shop, although Shop prices are unchanged this week. Mldg&Btr and Shop activity has moderated over the last few weeks, especially in Ponderosa Pine, with most producers processing the species in a seasonal change. Mill level action for Ponderosa Pine 4/4 boards is being distorted by seasonal increases in Ponderosa Pine production. Eastern White Pine producers report that they sense a "general market weakness," but most are still moving the volumes they need in order to keep reasonable mill order files. Idaho White Pine sales have been sporadic and focused on highly mixed truckloads. More evidence that a number of distribution yards carried ample volumes of Western Red Cedar appeared. Weather remained a barrier to consumption in the Rocky Mountain States and upper Midwest. Rains in the South limited consumption further.

Panels: Late in the week, volume purchases of OSB put an immediate brake on price declines, and a little positive attitude began to flow into the OSB market. Enough chaos was gone to give mills fortitude to stop deep discounting and even to move their numbers up a bit in some cases. Producers and secondaries reported slow trading in the Southern Pine plywood market, leading to price cuts. Trying to maintain some cushion, producers discounted to push order files into the weeks of May 13 and 20. A lack of demand for Western Fir plywood continued to infuse weakness into the market. Buyers continued to hold out, sensing more downside risk still left in prices. In Canadian plywood, producers reported varying degrees of discounting for most of the week. Buyers were able to get loads at prices ranging from one to five points off accepted lists. Particleboard buyers in the Southeast continued to look west for supplies, finding it difficult to locate all of their needs in the Southeast. MDF sales remained steady.

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