Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for June 21, 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: The need for SPF lumber producers to sell steady production volumes into markets exhibiting limited demand sustained chronic downward pressure on prices. Once again, mills lowered prices significantly for items needing sold most urgently. The Southern Pine lumber market continued to establish firmer footing, leading to more price stability. Sales activity was not substantially greater than in previous weeks; however, reduced floor stocks at mills have helped buoy prices. Some Coastal species lumber producers were a little more optimistic toward the end of the week after lowering prices and finding trading levels. Narrow widths remained weakest. Traders hoped current and upcoming production curtailments would help trim supplies to meet demand. The Inland lumber region continues to be oppressed by soft prices. The lack of volume activity keeps dimension lumber weak. The market has a feel of greater potential activity, but it remains vulnerable. Radiata Pine Shop is tight, holding firm to current price baselines. Ponderosa Pine industrial lumber remains uniformly firm, with Shop showing some especially strong demand. Producers note the difficulty of supplying adequate Shop to buyers. Ponderosa Pine 1x10 and 1x12 #2 Common boards are fairly firm, based on relatively light production, in contrast to the narrows, which are abundant. ESLP boards are stronger in #2 than #3, with both 1x10 and 1x12 being cited for strength. Demand for Inland Red Cedar has been “fairly good” over the last two weeks. Steady but lackluster sales activity remained in play in the Western Red Cedar market. A few producers pushed prices gently higher on a few items, but most left quotes flat. Some mills softened quotes on a few items.

Panels: Late in the week, both eastern and western OSB producers became even more aggressive than they have been over the last few weeks, offering some deep discounts to prospective volume buyers. The result is weaker prices in all regions across the continent. The Southern Pine plywood market remained mired in a continued imbalance between supplies and volumes purchased at the mill level. Despite a few producers reporting slightly improved yet sporadic sales, deep discounts were used to turn greater volumes into orders. Western Fir plywood demand was not enough to absorb production, leading to developing floor stocks at mills. A few producers lowered prices $20 or so early while others held the line more closely. Canadian softwood plywood has entered a phase of upward development over the last two weeks. Most volume buyers report that they are covering their needs at the published prices. Particleboard producers reported lighter sales to those customers taking varying amounts of downtime around the Fourth of July. MDF demand remained somewhat steady, but buyers reported that availability is continuing to improve slightly.

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