Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Nov. 18, 2011

*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: Another mid-week buying spree firmed SPF lumber prices. Demand came from a broad range of customer segments. Distributors purchased fair volumes, while wholesalers reported buying and selling at an elevated pace. The rate of sales activity in the Southern Pine lumber market was somewhat less than the week prior, but varied from mill to mill. Having purchased the week prior, some buyers stepped to the sidelines. Others purchased moderate volumes, having missed the bottom. Increased demand, particularly at mid-week, firmed Coastal species lumber prices and sent many of them higher by Friday. Elevated sales activity and limited production headed into the holidays tightened available supplies, causing a degree of "panic" buying. Pre holiday buying and an improved futures market were said to be the causes for a slight rally in Inland species lumber markets. The week started out slow, with much the same enthusiasm as previous weeks. Buyers stepped in mid-week and covered some immediate needs. Availability of Idaho White Pine boards was thin and prices were firm. Prices for Spruce-Lodgepole Pine boards were mostly unchanged. A mid-week flurry of activity added a momentary air of excitement to the board market and allowed producers to clean up some items. Ponderosa Pine producers reported order files into the end of December for 5/4 Mldg&Btr. Most suppliers report order files for Radiata Pine Mldg&Btr are through December. More Western Red Cedar producers felt the market slipping gradually into the winter doldrums. Conversations between producers and customers turned more toward next year, with relatively little business being placed for the remainder of this year.

Panels: Producers of OSB reported improved market activity in most regions. Not a lot of volume purchases were reported, but traders indicated good success with small back-to-back orders. Buyers continued to purchase Southern Pine plywood in enough volume to push prices higher and mill order files further out. Rated sheathing prices $10-20 higher were typical, while order files extended into early December and as far out as the week of 12/12. Relatively strong sales activity in the Western Fir plywood market prompted producers to raise prices on sheathing panels. Participation from customers in the East was key to mill order files extending out into the week of December 5. Canadian plywood was sold in a narrower trading range than last week. Although the volumes purchased were on the light side, mills were able to extend order files to the week of Dec. 5 Particleboard and MDF sales were lackluster, something expected by producers and buyers this time of the year. As has been the case for months, producers in the East sold output more readily than those located in the West.

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