Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for June 16, 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 finding firmer footing the week prior, SPF mills in both eastern and western Canada entered this week seeking moderately higher prices. Sensing no downside risk in the near-term because of cyclical low pricing, distributors contributed significantly to steady sales activity. For the most part, Southern Pine mills managed to sell much of their production at discounts ranging from $2-10. Blocks, however, sold with significantly deeper cuts. Those excess volumes often consisted of straight lengths. Traders reported a busier tone to the Coastal species market. Both the supplies available and pricing indicated greater market stability. Mills managed to clean up some of their excesses, which firmed up prices. In Inland lumber, the give and take of trading in recent weeks has led to discounting in Hem-Fir Std&Btr/#2&Btr lumber, and Fir-Larch saw some slight softening in a couple of items this session. Momentum in the stud market generated some higher prices, as buyers continued to fill needs at a solid pace. After selling off excesses the week prior, mills managed to bolster order files and quote higher levels. In Industrial lumber, price disparities between Radiata Pine and Ponderosa have reached levels that have virtually locked in both species. Ponderosa Pine 5/4 Mldg&Btr edged up to $1200 in recent trading, but the gains in all Ponderosa industrials have been very modest in recent weeks. Ponderosa Pine 4/4 Selects and Commons are currently riding a steady wave of demand, which is consistent but not aggressive. Eastern White Pine prices show little, if any, changes in recent activity. Western Red Cedar sales activity remained pedestrian at the mill level, although some pickup in sales after a month or so of slower transactions was reported by a few mills. Approaching the market more cautiously, yards purchased hand-to-mouth when it was necessary to fill inventory holes.

Panels: This week, OSB activity was subdued but firm in the US, while it was widely brisk in Canada. Having the construction season in full-swing and thin inventories in the field keeps panels moving through the pipeline and pricing stable to up. The pace of Southern Pine plywood sales slowed from the prior week, although a few producers did report strong sales Monday. From at least Tuesday, mills tended to fall back on order files which extended as far out as July 3. Western Fir plywood mills experienced “a good week” of sales. Activity overall did not match the prior week, but it was strong enough to push order files firmly into the weeks of June 26 and July 3 and propel some prices higher. The run which lurched ahead in Canadian plywood last week is still going, with pricing at levels not seen in years. Pricing shot up past the mythical $500 mark midweek, without causing even a pause in buying. A number of particleboard and MDF producers reported little change in their sales activity levels. A few western producers noted that demand for both items subsided a bit.

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