Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Aug. 2, 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: While wholesalers sold off positions at discounts to mill quotes, SPF lumber mills were content doing little in the way of adjusting prices, even though demand slowed. Sales activity slowed in the Southern Pine lumber market. Cautious buyers noticed shrinking order files, growing mill lists and a willingness among some producers, particularly on the Westside, to discount a few items, Demand for dry Coastal species lumber items remained strong, continuing to place upward pressure on those prices. Early activity led to quick price increases that held steady throughout the remainder of the week. Current activity levels in Inland species lumber have moderated, but the mill-based prices have not come down as a result. Mills are working off lean inventories and feel no need to discount the modest volumes of #2&Btr lumber that they are developing. Radiata Pine industrials are holding firm, despite reports that some surpluses of Mldg&Btr have developed. Ponderosa Pine Shop remains on an upward vector, Mldg&Btr has begun to show the effects of weak demand for solid lineal mouldings. Demand for Shop lumber, on the other hand, remains very brisk, and prices continue to move upward. Ponderosa Pine 4/4 boards continue to strengthen, especially in the wides. Demand for ESLP boards is reported to be muted. Eastern White Pine producers report that they are “maxed out” on available supply but that the market is firm and stable in prices and demand. Several Western Red Cedar producers reported stronger sales in July than June, which might be the result of milder summer weather in parts of the South. Buyers continued to replenish needs at a consistent rate.

Panels: Almost without exception, sources agreed it was a quiet week in OSB. Despite the fact that most producers held their numbers unchanged, some soft areas became evident. The Southern Pine plywood market took a breather after sales activity improved throughout much of July. Yards and wholesalers turned more of their attention toward taking delivery of prior purchases. Western Fir plywood sales did not show the same vigor as the week prior, but enough energy was generated to allow producers to nudge several prices moderately higher. Continued exports to Canada helped mills push order files into the latter half of the month. A number of factors combined to make this a quiet week in Canadian softwood plywood sales. Despite that, neither producers nor distributors call the market potentially weak. Agreement is missing with regard to the upward movement of the market. Both particleboard and MDF producers reported that July was a slower month, which was not a surprise. Orders were not as prevalent in July as in previous months and not consisting of the volumes producers are expecting in the future.

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