Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Oct. 25, 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: Demand from wholesalers the week prior for SPF lumber set the market up for less activity at the mill level. Many wholesalers also ended up in Las Vegas for the NAWLA Traders Market, which kept them away from their phones for much of the week. Buyers also considered declines in futures as a reason to stay on the sidelines. Slower sales activity throughout October left Southern Pine lumber producers with the challenge of managing inventories by way of price adjustments. Month-end sales often consisted of significant block volumes moved off with hefty concessions. In the Coastal species lumber market, narrow width demand and production remained balanced, prompting steady prices or slight adjustments. At the same time, strong upward pressure continued to dominate wide width pricing. For the most part, Inland species #2&Btr prices remained at stable levels, moving up very modestly where change was evident. Most mills continue to report slim inventories in the Inland species, creating a need for some buyers to look elsewhere. Prices of Ponderosa Pine #2 Shop are still pushing up very modestly, but potential buyers seem more concerned with continuing supplies. With window producers showing their seasonal pickup in business, the market for #2 Shop has been the primary focus. Ponderosa Pine #2&Btr boards have been hit hardest because of the increased demand from big box stores. Eastern White Pine producers report that their markets are very stable in demand. Those sales staffs manning the phones while a large segment of the Western Red Cedar market made their way to the NAWLA gathering reported a quiet week. Buyers continued to purchase highly mixed volumes to fill in inventories or cover volumes already sold.

Panels: The situation in OSB has deteriorated a bit more. Flat pricing is no longer the norm, as almost all regions show some losses. The South continues to be soft, with even the Southwest showing more vulnerability. A lack of energy in the Southern Pine plywood market kept downward pressure on rated sheathing and underlayment prices. Buyers showed more interest in prodding the market for deep discounts than purchasing at moderately lower price levels. Western Fir plywood producers sold volumes into the week of Nov. 4, yet some availability remained for shipment the week prior. Those producers willing to drop CDX prices about $5-10 found buyers more likely to purchase moderate volumes. Both producers and distributors of Canadian plywood commented that their customer bases are not actively seeking wood. Mill order files are reported as being either 11/4, or out as far as 11/18. Particleboard producers noted some improvement in their market after a few weeks of selling less than production. MDF sales in both the West and East remained lackluster.

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