Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Aug. 9, 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: Sales activity in the SPF lumber market was spotty and sluggish, but tight supplies of certain items generated some higher pricing. Having purchased much of their August needs, buyers held out in greater numbers. Prices hit a wall in the Southern Pine lumber market, forcing some to recoil, particularly on the Westside. Approaches by mills in that region varied in respect to pricing, dependent on the level of urgency at a particular mill. Much of the pricing in Coastal species lumber remained stable or found higher levels at which to trade. Dry prices were more likely to rise than those in green Doug Fir. Inland lumber producers continued to struggle with broken inventories of most lumber grades but found that #2&Btr was getting more attention from buyers than were the uppers. Radiata Pine prices are stable, although some South American Mldg&Btr has discounted slightly. Ponderosa Pine industrial lumber is “Weak at both edges,” according to one source. The slowing of millwork has led to softening in lower grades of lumber, and more blanks and blocks are being offered. Ponderosa Pine 4/4 boards remain “hot,” as one source noted. Activity for Idaho White Pine boards is less energetic than Ponderosa, due in part to mills being sold out or lacking good tallies. ESLP boards are firm and moving in both #2 and #3 Common. Eastern White Pine boards are nicely balanced between supply and demand August is not expected to be a great month in regard to Western Red Cedar sales volumes. Fill-in activity continued to provide steady business for mills, as yards replenished items while keeping inventories in line with late summer levels.

Panels: The entire continent shows varying degrees of softness in OSB activity and pricing. The presence of secondary product is forcing that level of the market to take aggressive action, putting downward pressure on prices. Sources at Western Fir plywood mills reported a range of activity. Perhaps most indicative of trading levels were price moves, which were few but modestly upward. The Southern Pine plywood market was flat in respect to both price and demand. Although a few mills reported selling close to a week’s worth of production, mill order files, for the most part, remained in the weeks of August 19 and 26. While Canadian plywood producers say prices are “up a couple more,” distributors are very wary about the length of mill files and the implications of a decaying OSB market. August and the slower seasonal sales it generally brings continued to envelope both particleboard and MDF markets.

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