Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Feb. 27, 2015

*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: As the urgency to sell increased in the SPF lumber market, prices grew weaker. A few producers reported taking additional orders from China. Hearing this, some buyers chose to step in to purchase. Thursday’s modest gain in the March futures contract was preceded by three days of losses, which failed to instill any confidence in the market. Icy, snowy weather limited Southern Pine lumber consumption across a large swath of the US, but it also affected production. The lack of demand clearly outpaced the decline in mill output, placing downward pressure on prices. Although West Coast dockworkers and operators reached a tentative deal last week, there is still gridlock at the ports, keeping stateside volumes of Coastal species lumber that typically ship to Asia. In addition to decreased demand, Inland lumber has been subjected to intense pressure from Canadian stock. This has particularly affected all white woods, causing them to decline a bit more than such species as Fir-Larch. Stud mills began the week looking for sales at lower price levels. By Thursday, traders reported a slightly better tone to the market, but by then, discounts of $10 to $15 were common. Yards selling Western Red Cedar often closed because of weather conditions while weather in the producing regions remained abnormally mild. Mills continued to produce for orders taken well into March and asked customers what their needs might be in the second quarter. Radiata Pine exporters report solid demand for Mldg&Btr, although price gains have so far been spotty. Ponderosa Pine Shop has stabilized in recent weeks, but more than adequate supplies of both #3 Shop and P99 exist, even though prices are holding flat. Buyers looking for Ponderosa Pine boards will readily pay the list price, if a mill has a buyer’s very selective order. Weather continues to be a major factor for Eastern White Pine. Inland Cedar is not robust, either.

Panels: Activity in the OSB realm went from slow last week to almost non-existent this week, due to ongoing winter weather conditions in the East. Order files run as far out as the weeks of March 9-23, but plenty of prompt wood was reported available. Southern Pine plywood producers leaned on eroding order files to maintain rated sheathing prices. A smattering of buyers across a broad spectrum of buying segments participated. Several Western Fir plywood producers reported improved sales in the latter half of the week, but discounts grew deeper in comparison to prior weeks. Canadian plywood markets became harder to track this week, with mills and buyers watching each other narrowly. Not much volume was traded. That said, there was fairly strong agreement that two points off represented a reasonable level. Sales out of eastern particleboard mills remained stellar. Order files moved into the latter half of March. MDF sales remained steady. Supplies remained tight due to the bottleneck at West Coast ports

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