Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Feb. 3, 2012

*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 rumblings suggesting an increase in sales activity at the end of the previous week, more buyers entered the SPF market early to pull significant volumes from mills in both eastern and western Canada. By Thursday the pace had slowed, leaving prices firmly perched at higher levels established the prior few days. Buyers showed limited interest in chasing Southern Pine dimension prices any higher, preferring to sell from inventories and wait for potentially lower prices. Consequently, sales at the mill level were light. Some discounting did appear; however, as producers, particularly on the Westside, chose to sell straight-length loads with moderate discounts. Demand at the mill level increased in the Coastal species lumber market, allowing producers to move greater volumes than the week prior. In light of the improved sales activity for dry items, producers chose to increase their order files rather than risk losing business with higher prices. Green Doug Fir prices tended to climb moderately. Inland species lumber producers reported a market that improved in early trading. Futures gains brought traders back to the market for not only SPF, but inland species as well. Producers focused on building order files. Ponderosa Pine Moulding and Shop lumber producers reported a steady but uneventful week. Limited production helped keep prices firm, in spite of a quiet market. Inquiries for Radiata Pine #2 Shop and Blanks increased, but availability continues to be tight. Limited supplies of Idaho White Pine boards kept prices firm to up slightly. Eastern White Pine producers reported steady sales and prices that were firm or slightly higher. Activity throughout the distribution chain in Western Red Cedar was moderate yet steady, greased by mild winter weather throughout much of the United States.

Panels: The strength of OSB markets this week relied on mills' order files. Producers reported a quiet week of activity. Better order files enabled western producers to keep a firmer stance than their eastern counterparts. Limited demand in the Southern Pine plywood market forced a few producers to reach deep with rated sheathing prices to sell what was needed. The deepest discounts remained on the Westside. Thin order files forced Western Fir plywood producers to lower quotes on CDX items by double digits, while sanded panel items sold for shipment through February and at significantly higher prices. Canadian plywood producers reported another quiet week of sales. Although activity was not robust, order files helped producers keep some semblance of firmness in the market. Any momentum gathered in January in regard to particleboard sales volumes did not have a lot of push behind it entering February. MDF sales activity was modestly improved.

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