Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Aug. 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: Good demand throughout the distribution chain kept upward pressure on SPF prices, particularly narrow widths. Yards reported selling healthy volumes, while wholesalers continued to purchase and sell at a consistent pace. Limited volumes shown by mills kept upward pressure on Southern Pine prices. Buyers again noted broken tallies at mills. Truss manufacturers have been instrumental in the market's current upswing, while treaters have participated, but notably less than in the spring. Coastal species lumber prices continued to tilt upward, as demand outpaced production and mills maintained solid order files of two weeks and sometimes longer. Frustration with finding good random tallies was still prevalent with Inland species lumber buyers. Mill offerings continued to be bits and pieces, unless buyers were willing to book orders several weeks out. Business remained steady for Eastern White Pine, and producers' order files were out two weeks or more on some items. Light volumes of Idaho White Pine were sold at current price levels. Activity for Ponderosa Pine boards remained quiet. Producers reported light but steady sales of #3 and #4, but #2&Btr was a struggle. Ponderosa Pine industrial lumber producers continued to struggle to find a home for the upper grades of Shop. The few sales that were made came with counters in the $15 to $25 range. Activity was a little better for #3 and P99. Sales of Radiata Pine Mldg&Btr remained steady, and suppliers were able to maintain good order files. Steady to slower was how most Western Red Cedar traders described sales activity. The sluggish market left producers with little opportunity to raise prices. Orders often consisted of several items.

Panels: Order files and moderate demand propelled OSB prices upward. Decent sales activity in all regions strengthened the perception that the market still had wood to buy. Several Eastern Canadian producers went off the market towards week's end. Lean inventories and better demand than what yards expected during the summer contributed to escalating prices in the Southern Pine plywood market. Adverse to those high prices, buyers are purchasing conservatively, subsequently forcing them to step back in to the market to purchase on a consistent basis. Western Fir plywood sales continued at a strong pace, elevating prices in some instances to levels not seen since October 2005. After a healthy run in the Canadian plywood market last week, the pace was subdued until midweek, when producers reported an increase in activity for both standard and selects. Particleboard and MDF sales were steady and prices were stable. Some mills carried MDF order files well into September. Others had lead times into the latter half of August. Particleboard order files were usually two weeks out.

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