RISI Crow’s Market Recap for July 13

A price index of lumber and panels used in actual construction for July 13, 2018.

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

Sales activity in SPF remained subdued. Bearish stances were evident among buyers, while some traders felt a replenishment buy was approaching. Some mills in the West held 2x4 quotes above the $600 mark, well above trading levels. Mills made EFP transactions, buoying order files. Straight lengths, which mills placed much of their efforts into selling, could be bought at sizable discounts.

• Excess Southern Pine lumber supplies remained available, maintaining downward price pressure. Those surpluses were less evident in wide widths than narrows. While downside price risk persisted, buyers continued to purchase hand-to-mouth.


• Discounting continued to play a major role in Coastal species lumber sales. Soft market conditions kept buyers from stepping in with both feet, seeing no end to more potential downside risk. Traders pointed to continuing competition out of Canada for some of the weakness.


• Inland lumber markets were inhibited by two primary sources: the annual Inland Lumbermen’s Meeting, held in Coeur d’Alene, Idaho; and the lack of confidence among buyers that the market has truly firmed.


• Stud buyers often agreed that pricing for specific items spanned broad ranges. Others noted that mills sporadically lowered prices considerably below market quotes to sell a specific item.


• Mldg&Btr was reported to be in modest supply in both Ponderosa Pine and Radiata Pine, although that did not apparently present any serious problems. Mldg&Btr and Shop lumber remained unchanged in price, although smaller users still reported some difficulties finding product. Ponderosa Pine Selects and Commons have begun to take on some of the market strength they usually show much earlier in the year. Selects were quite stable, unchanged in prices. Among the Commons, #2 were best.


• Western Red Cedar producers maintained solid order files. Those producing timbers generally reported extended lead times. Inquiries from customers looking for timber coverage were common. Supplies of decking remained a relatively difficult item to sell, especially 5/4x6.

Panels

Over the past two weeks, long-elevated price structures for OSB came apart in large chunks. Producers actively sought business, offering concessions reported significantly below established price levels. However, buyers down the chain grew increasingly reluctant to take volume.

• Southern Pine plywood producers experienced a moderate pickup in sales activity. Demand for many grew as the week progressed. Discounts of $20-30 for thicker rated sheathing panels were used to entice buyers. Producers sold railcars at even lower price levels to stretch deliveries into other Southeast zones and California.


• Although traders found the pace improved over a disruptive week prior, Western Fir plywood continued to be discounted. Buyers replenished in truckload quantities while railcar volumes lagged. Most producers reported order files extending as far out as the week of July 30, but quicker shipping volumes were available.


• Canadian plywood activity picked up a bit this week following a price correction away from sustained near-record highs. Buyers remained cautious; however, not wishing to take on volume in a falling market.


• Customers entered particleboard and MDF markets picking up where they left off prior to the more subdued holiday week. Producers cited few issues regarding their ability of sell production. Covering the rising costs of freight and resin remained a concern among producers.

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