Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Aug. 1, 2014

*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 remained lackluster, eroding mill order files and forcing producers to lower quotes in some instances. Thursday’s moderate gain in futures gave some buyers and excuse to participate. Prices in Southern Pine maintained the same direction they have now taken for the past several weeks. Stronger gains appeared in 2x4 and 2x6 #2, with mills able to push those prices as much as $20 higher. Wide width pricing remained weak. Producers reported a quiet week of sales on the dry side of the Coastal species lumber market. Quotes were lowered early in the week. Meanwhile, green Doug Fir prices remained solid. Most Inland lumber producers are content to call the market flat or unchanged, taking modest volumes of orders and keeping the market tidy. Some discounting, however, has occurred. Reports indicate declines in most Fir-Larch and Hem-Fir #2&Btr dimension lumber. In Radiata Pine, neither New Zealand nor Chile acceded to the wishes of discounters, both countries keeping their prices stable. A volume of Ponderosa Pine in both 5/4 and 6/4 Mldg&Btr was sold, and a good volume of both 5/4 and 6/4 #3 Shop entered the books. Major activity took place in Ponderosa Pine #2 Commons, resulting in sizable discounts on some items. Most of this action came from mills needing to reduce sizable inventories. Inland Cedar producers report that the market is perhaps best in D Select, with #3 firm. Producers of Western Red Cedar accepted a more pedestrian pace that late July and August usually bring. Buyers continued to purchase after selling enough volumes from their yards, but new orders often consisted of highly specified mixes.

Panels: OSB market direction went mostly sideways or down this week, making the situation seem like a broken record. Prompt wood is available, and most order files only go out a week or two. A few producers pulled off the market, which had little to no impact. Sales activity at Southern Pine plywood mills settled down after last week’s surge. More lead times moved into the week of Aug. 25 or beyond. Wholesalers purchased much less than the week prior but remained bullish. Western Fir plywood producers succeeded at wringing $5 to $10 more out of sheathing market after watching much of the price momentum established the week prior dry up. Canadian plywood markets sobered up this week, with no price movements since last Friday’s jump to nearly $500 for Toronto 3/8” spruce. Inventory was reported short in the pipeline and activity strong on the retail level. But distributors took a breather, reeling in purchasing activity this week. Stronger shipments than expected for the month of July surprised some particleboard and MDF producers. Other than normal sales, most sources reported an uneventful week.

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