Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Nov. 1, 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: Solid trading activity and strong order files continued to place upward pressure on SPF lumber prices. Wholesalers continued to “work the edges,” purchasing those items in which quicker shipments were available. Announcements late last week regarding two mill closures stirred up the market, even though the production cuts will not occur until next year. After deep discounts allowed producers to sell significant volumes of Southern Pine lumber the week prior, buyers continued to frequent the market, looking to fill needs with low priced volumes. After moving off floor stocks, some mills, particularly those in the West zone, raised quotes aggressively. Buyers continued to reenter the Coastal species lumber market in search of replenishment volumes. This, once again, placed upward pressure on most dry and green prices. Continued strength in wide widths generated some of the biggest single-week price gains of the year. Steady demand continued for Inland species lumber. Selection and supply remained limited, forcing buyers to make purchases for delivery several weeks out or turn to secondary sources for fill-in coverage. Reported weakness in the Radiata Pine Mldg&Btr market was offset by the lack of available product. A report of a discounted sale circulated, but most importers sold at or near published levels. Producers of Ponderosa Pine Moulding and Shop lumber reported steady sales, with #2 Shop leading the way. Ponderosa Pine board buyers showed frustration over the lack of availability of #2&Btr. Availability of ESLP boards remained tight, and some prices moved higher. Eastern White Pine producers, with 2-4 week order files, priced defensively. The seasonality of Western Red Cedar sales continued to emerge, as more market players reported quieter sales activity. 

Panels: OSB markets in most regions showed vulnerability, as producers quietly looked for help with weaker items in their product mix. Mill order files out to the middle of November kept strength in some items. Secondaries reported market prices were generally down. Southern Pine plywood mills offered discounts and listened to counters, especially early. Blocks often offered at $15 to $25 less than published prices established trading levels and allowed mills to move order files into the week of Nov. 11. Wholesalers participated in greater numbers. Buyers often entered the Western Fir plywood market with a lower, predetermined price level at which to purchase. Because of production costs, producers also had a price in mind. They met in between enough to nudge mill lead times into the week of 11/11 or sooner. The range of Canadian plywood prices quoted and orders taken was wide. Quotes ranged from prompt shipment, to the week of Nov. 25. Buyers making lower offers reported varying success. Mill sales were mixed in both particleboard and MDF; the weekly ups and downs expected throughout the remainder of the year.

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