Market Recap: RISI Crow’s Construction Materials Cost Index
A price index of lumber and panels used in actual construction for March 21, 2014
*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: Transportation issues remained at the forefront of the list of influences driving the SPF lumber market. A lack of railcar availability kept prices firm, despite slow trading activity. Mills in the East demonstrated greater desire to garner orders, lowering prices moderately. Sales activity at Southern Pine lumber mills was often described as “slow.” Lackluster trading placed more downward pressure on pricing across all zones, except for 2×10, which increased in a range of $5 to $10 in all regions. While dry prices in the Coastal species market remained mostly firm, green prices, especially the narrows, dropped significantly. Weather conditions in the northern-tier regions of the country garnered some of the blame for modest to moderate demand. A weakening futures market early in the week had Inland lumber buyers, especially Hem-Fir/White Fir buyers, stepping back from the table. By week’s end, futures had rebounded, and the market returned to its previous pattern. Steady sales of Radiata Pine Mldg&Btr kept prices firm, although pressure from buyers to get price concessions increased. Producers for now are resisting the pressure. Buyers reported getting more offers from producers for Ponderosa Pine P99 in both 5/4 and 6/4. Prices for both were vulnerable. Sales people at Ponderosa Pine board mills spent their time between answering calls for status on previously sold orders and inquiries for products they often did not have. Prices for Idaho White Pine Sterling grade came off, while both Standard and Utility were unchanged. Sales of ESLP were quiet, with most prices unchanged. The waiting game in the Western Red Cedar market continued. Market players pointed to April as key to determining what kind of year it would be regarding sales.
Panels: OSB sales activity in the market remained light with the bulk of the business being done at the secondary level. Mills continued to struggle to get shipments out on time, with most being unsuccessful in their attempts. Southern Pine plywood producers had the impression that buyers were low on inventory and would need to increase their participation in the market. Meanwhile, buyers sensed that mills edged closer to a point where discounts would become a bigger part of the market. Continued slow Western Fir plywood sales and order file erosion forced producers to seek CDX sales early at discounts of $5 to $10. Price negotiations in that range did little to spur more buying, so those mills more desperate to sell off excess volumes softened their stance further. The Canadian plywood market started the week on a quiet note, with contract loads able to cover most distributors’ needs. Later, producers were able to put together enough sales to push order files into the week of April 14. Particleboard and MDF producers in the East and South continued to sell strong volumes, often well above their weekly output. Mills in the West did not experience the same kind of sales, with the tone in those markets being steady but lackluster.
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