Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Sept. 27, 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: Market momentum carried over from the week prior prompted SPF lumber mills to increase prices early. Extended order files at mills prompted buyers to look elsewhere for coverage, which led to solid and steady sales at the secondary level but slower sales at mills. After a somewhat sluggish start to the week, Southern Pine lumber trading improved moderately, providing enough momentum to keep most dimension prices moving higher, although some discounts remained in the mix. The sales pace in Coastal species lumber slowed, but momentum continued to press prices higher. Distributors sold steady volumes and purchased to fill-in inventories, but hesitation to buy back in kept some customers on the sidelines. A limited amount of mill offerings continued to keep the Inland species lumber market on an upward trend. Some producers reported a quieter pace than last week, but most felt it was due to a lack of offerings rather than a slowdown in demand. Radiata Pine traders reported a solid market, with some saying they had Mldg&Btr order files out to the end of the year. Inquiries for Ponderosa Pine #2&Btr Shop were most prevalent, with most coming from door and window manufacturers and cut stock plants. Producers of Ponderosa Pine Selects and Commons reported strong demand in all but a couple of grades and sizes. Idaho White Pine producers reported light offerings. ESLP producers continued to hold prices firm while quoting shipment times well into October. Buyers’ needs, consisting of minimal volumes but covering a broad range of Western Red Cedar items, generated highly mixed orders at mills. Buyers kept a close eye on inventories and inbound shipments, not wanting to carry any idle volumes.

Panels: The OSB market remained on firm ground with producers in control. Western market continued to lead the rally with mill order files out 2-3 weeks or more. Moderate sales activity in the Southern Pine plywood market left prices firm or edging higher. Producers reported order files mostly in the weeks of October 7 and 14. Buyers often steered toward the quickest shipping volumes. “Steady and unspectacular,” was how one producer described sales activity in the Western Fir plywood market. Steadiness in the market allowed producers to raise prices moderately. Order files moved solidly into the week of October 7, extending in some instances into the next week. A mild uptick in activity on Thursday was not enough to move Canadian plywood prices up, but was enough to add to mill order files and pull a few buyers off the fence. Other than the Thursday action, the overall tone of the market was a quiet one. With particleboard and MDF markets about to begin October, most producers are somewhat disappointed with the amount of business brought their way in September.

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