Market Recap: RISI Crow's Construction Materials Cost Index

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

SPF pricing weakened further as deeper discounts appeared. Mills took a more aggressive stance in many instances while others, those with extended order files for narrow-width items, stuck doggedly to those elevated quotes. Mills frequently reported selling well below a week’s production.       

  • Much of the strength in the Southern Pine market centered on narrow widths while wides struggled to find any upward momentum. Interest in narrow widths among buyers remained solid as some substitution of Southern Pine for SPF continued to take place. Several producers reported a more restrained sales pace, particularly toward the end of the week.
  • Urgency to buy or sell Coastal species was constrained. Buyers sensed some access to lower prices in dry items. Most green Doug Fir prices tended to hold at last week’s reported levels, with the exception of higher 2x12 pricing.
  • Despite good demand for Inland products, producers reported a general slippage in most prices being achieved. Fir-Larch was less vulnerable than Hem-Fir, but both species reflected attempts by secondaries to ease the market off a bit in order to gain a chance to buy.
  • Traders agreed that stud prices were “all over the place,” signaling weakness across much of the market. Most prices were flat to down, with a few exceptions. A few SPF producers tried to sell volumes of 2x4 8-foot and 9-foot carloads at steep discounts.
  • Current markets for industrial lumber and finished mouldings were quite different in tone and pace, and Ponderosa Pine was reported to be tight, especially in 5/4 Shop. The situation in Ponderosa Pine boards, in general, showed tight supplies and “lots of demand,” according to one source.
  • In the Western Red Cedar market, takeaways from yards continued, albeit at a more modest pace than earlier in the fall, and buyers continued to look for a mix of items to fill in inventories. Mills reported carrying less inventory this time of the year than in other years.

Panels

OSB was a mixed bag this week. Markets weakened in some regions, while they stabilized in others. Patterns were the same, as buyers cautiously purchased only what they needed. More people came to the table this week, infusing optimism into the overall mood.          

  • Southern Pine plywood activity picked up in the middle of the week, spurred by buyers looking to fill immediate needs with prompt shipping volumes. Overall, however, the pace remained restrained, leaving rated sheathing available for shipment in the week of Dec. 4.
  • Sales activity improved in the Western Fir plywood market, but reactions to the increased pace were restrained. After waiting while prices dipped over the past several weeks, more buyers stepped in to replenish conservatively. Double digit CDX discounts early faded away as the week progressed, but pricing ended moderately lower.
  • The Canadian plywood market firmed this week as mills pushed out order files and buying picked up. Pricing was unchanged.
  • Some producers of particleboard and MDF noted a moderate increase in sales after a sluggish holiday week. Buyers reported readily obtainable particleboard and MDF supplies for December shipment. Yards managed inventories carefully prior to year-end.

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