Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Jan. 12, 2018.

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

Demand for SPF gained momentum, particularly in eastern Canada. Interest among buyers involved all dimensions in #2&Btr, sending those prices higher at both eastern and western Canadian mills. Buyers continued to cover jobs while yards replenished after drawing inventories lower in December.

  • Southern Pine #2 prices increased in large part due to fewer supplies available and sales momentum as the week progressed. Mills reported strong volumes sold, particularly in the latter half of the week. Warming temperatures as the week progressed aided consumption. Mill order files often extended out near the end of January as buyers purchased February needs.
  • The Coastal species lumber market started out on mostly firm footing and grew in strength as the week progressed. Strong demand and barriers to any production increases placed upward pressure on prices.
  • Inland lumber producers reported “an excellent week,” as buyers busied themselves with pre-spring ordering, leading to price increases in Fir-Larch and signs of firming in Hem-Fir. The strong demand combined with tight log supply to encourage a positive tone.
  • Demand for 9-foot trims remained strong in the stud market while 8-foot sales activity gained momentum. Buyers purchased February needs, seeing less availability for shipment in January. Jobs continued to be covered.
  • Radiata Pine industrials were reported unchanged in either Mldg&Btr or Shop.
  • Ponderosa Pine industrials remained solidly priced in both Mldg&Btr and Shop. The 5/4 Shop remained a focus of buyers, pushing it up $5–10. Ponderosa Pine 4/4 material continued to be tight. High log prices were reported, which supported firm prices but caused concern among producers. Major buyers have filled January needs, giving mills more than adequate order files.
  • Winter weather continued to disrupt consumption, but moderately warmer temperatures helped Western Red Cedar move from yards more readily. Producers reported decent sales for this time of year. Some Canadian producers continued to seek higher prices by raising quotes.

Panels

OSB markets showed a little more activity than last week with weather out of the deep freeze and everyone back at their desks. Though order files are only out a couple of weeks, transportation issues triggered by the cold have deliveries backed up. On the other hand, construction has slowed for the winter. 

  • Sales activity in the Southern Pine plywood market continued at a solid pace, moving order files out to the last week of January and keeping upward pressure on prices. Some lead times extended into early February. Cold weather experienced the week prior continued to pose production problems for a few mills.
  • Western Fir plywood buyers remained active, leading to higher prices and mill order files extending into the weeks of Jan. 29 and Feb. 5. Mills approached CDX pricing more forcefully, raising quotes $25–30 by the week’s end. Traders expressed some surprise regarding the level of market strength in January.
  • A fresh rally picked up in the Canadian plywood market as mills pushed order files farther out and buyers with thin inventories stepped in.
  • Particleboard and MDF producers reported a fair amount of business for the beginning of a new year. Expectations involving a significant increase in buying sometime within the next month or so was clearly present.

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