Market Recap: RISI Crow's Construction Materials Cost Index


A price index of lumber and panels used in actual construction for Feb. 24, 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: SPF lumber prices remained at steady levels and firm. Demand improved Wednesday, leading to modestly higher quotes for straight lengths of #2&Btr. Low-grade prices showed significant gains in both the East and West, rising $10 or more in many instances. A groundswell of activity in Southern Pine the week prior increased early, leading to firming dimension lumber prices and double digit increases by Thursday. Demand was broad-based, with treaters, wholesalers and distributors participating. Coastal species lumber producers dangled discounts for #2&Btr dry items in front of buyers early in an effort to get volumes flowing. Demand increased at midweek, firming prices and edging a few higher. Green prices were mixed, while low grades increased. Inland species lumber producers reported a quiet start to the week, but activity improved as the week progressed. Reports of escalating truck rates due to increasing fuel costs circulated late in the week. Eastern White Pine board producers reported "good movement" and three-week order files. Limited supplies of Idaho White Pine kept prices on firm ground. A lack of available wood remained a strong driving force in Ponderosa Pine board markets. Ponderosa Pine Mldg&Btr producers reported a quiet but steady market. Activity for Shop grades was even quieter, and discounts of $5 to $15 were needed to book #3 Shop. Radiata Pine Mld&Btr sales were sometimes described as "lackluster." Prices were firm at published levels, as producers preferred to garner orders for the mill, rather than risk shutting off the market with a price increase. Sales of Western Red Cedar were steady, but lackluster overall demand and availability of most items provided a barrier to higher prices. Mills tried to move prices higher on those items more thinly supplied.

Panels: OSB markets started out at a moderate pace after the Monday holiday but kicked into gear by Wednesday. The market was driven by continued mild winter weather, light inventories at the distribution and retail levels and producers keeping production in line with customers' needs. Upward prices pressure on Southern Pine plywood increased, as buyers once again came into the market to replenish thin inventories and establish positions. Mill order files stretched into the week of March 19. Strong Western Fir plywood sales activity sent CDX prices to levels not established since the summer of 2010. Producers began to focus more on moving prices higher than establishing a lengthy order file. The momentum in the Canadian plywood market continued, as producers extended order files and increased prices. Activity was spread among all markets. There was little change in MDF and particleboard markets. What has been established over the first two months of the new year remained in play for most producers. 

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