Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Jan. 6, 2017.

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: After buyers increased their purchases of SPF lumber between holidays the week prior, mill sales diminished the first week of the new year. Cold weather throughout much of the US and Canada - subzero in some regions - limited consumption. Traders awaited an announcement expected from the US International Trade Commission on January 9 as to whether it will determine injury to the US industry in the lumber trade dispute. Southern Pine mills lowered prices early to move off quick shipping volumes, and buyers responded by increasing their purchases. By week’s end, prices firmed and mill order files increased to 7-10 days in many instances. Producers of Coastal species often reported prices close to the prior week’s levels. Sales at those price levels were lackluster but enough to keep any discounting minimal or spotty. Inland lumber markets are “overall healthy,” according to one key producer. Buyers are quite optimistic, despite the penetrating cold that pervades much of the nation. Buyers are looking for modest volumes of specific items. Demand for studs was light overall, placing downward pressure on some prices. Limited order files, thus prompt availability, moved producers to lower some prices. Industrial lumber prices are stable, although a few changes in 6/4 Ponderosa Pine Shop were reflected in this week’s lists. Buyers are becoming aware that the lower grades of Shop are less abundant than they have been. Ponderosa Pine Common boards show some vigor in both #3 and #4 narrows, especially for 1x4 in those grades. Other board species are stable in price and unremarkable as regards demand. A degree of hesitancy to sell among Western Red Cedar producers appeared in spotty instances. Limited near-term log availability, rising log prices and uncertainty surrounding future timberland accessibility all contributed to producers’ more cautious approach.

Panels: After a holiday lull, OSB activity started the new year relatively strong in almost all regions. Producers are bullish and pushing ask levels higher for panels, though buyers are reluctant to bite at those numbers. Still, prices moved up $5-10 at mill level in all regions but Eastern Canada. Most Southern Pine plywood producers reported satisfactory sales, although not in great enough volumes to raise many prices. As a result, few price changes took place. Minor discounting appeared in some instances, but wholesalers reported a fairly firm stance among many producers with regard to pricing. Modest levels of sales activity in the Western Fir Plywood market thinned order files at mills and prompted some producers to negotiate sheathing volumes. While some producers offered prompt shipping carloads of CDX at $10 discounts, others chose to maintain a firmer approach to the market. Canadian plywood markets came out of the holidays firm, but with notably lower energy. Weather is a dampening factor. Despite limited order files and plentiful availability, at least one western particleboard producer approached the market with price increases due to a raise in resin costs. MDF sales were slow to moderate, but producers reported seeing busy customers, including moulding manufacturers. 

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