Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Oct. 4, 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: Slow sales activity at SPF mills kept prices from moving higher. Futures at a large discount to cash added some uneasiness to the market. Traders’ called the market “confused” and “a mixed bag;” those descriptions inspired by relatively strong sales at yards, sluggish sales but firm pricing at mills, and significant discounts offered by some wholesalers. Southern Pine lumber mills reported selling less than their weekly output, which eroded their order files and placed more downward pressure on prices that were already suspect. Mills often reported a moderately slower pace to the Coastal species lumber market, yet prices remained firm or edged higher in a few instances. Sales in the field were mixed, with some yards reporting steady sales, while others said takeaways slowed. Inland species lumber producers reported slower sales but attributed the slowness to a lack of available prompt inventory and buyer’s hesitancy to make purchases for two or three weeks out. Buyers turning to office wholesalers found offerings at the secondary level were also limited. Activity for Radiata Pine was light on inquiries, as well as offerings from producers. The strength in the Ponderosa Pine industrials market continued to be demand from door and window manufactures and cut stock plants, which helped push mill order files for #2 Shop out to late October. Ponderosa Pine #2&Btr Common boards remained the price leader in the board market, while #3 and #4 tagged along, but at a much less feverish pace. Eastern White Pine producers reported order files to the end of October with a few items into November. Western Red Cedar producers often spoke of a gradually slowing market over the long haul but said they experienced steady sales during the week.

Panels: The OSB market remains strong and holding firm, although more buyers turned to secondaries for coverage. With mill order files close to the end of October, producers were in no hurry to compete with inventory in the hands of traders. Customers were not as active as in prior weeks, but Southern Pine plywood producers continued to press prices moderately higher wherever an opportunity presented itself. Most mill order files did not get beyond the week of Oct. 14. Buyers continued to purchase enough volumes to push orders at Western Fir plywood mills out another week. Lead times in the week of Oct. 14 were common. Buyers purchased sparingly, but still needed to fill inventory holes generated from good takeaways out of their yards. A few Canadian plywood producers decided to clean up any remaining items and move order files beyond the upcoming holiday week. In order to do that, some sales with discounts took place. Spotty signs of slightly slower MDF sales continued to creep into the market. Particleboard sold at a steady pace, and buyers reported good availability. 

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