RISI Crow’s Market Recap for May 18

A price index of lumber and panels used in actual construction for May 18, 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

Steady demand and limited mill offerings continued to propel SPF lumber prices strongly higher throughout the week. Near-term needs outweighed any potential future downside risk. Although mills in western Canada reported moderate improvements in railcar availability, the numbers still lagged needs.

• Southern Pine buyers remained immersed in their market, still trying to cover needs. Yards reported strong sales and difficulties trying to find a variety of items to replenish, thus some holes developed. Those that managed to bolster their inventory positions often paid elevated prices.


• Demand for Coastal species remained strong. Yards reported selling solid volumes for yet another week, prompting them to replenish. Availability at mills was often tight.


• Inland lumber markets continued their very strong performance of the last few weeks, fueled by powerful demand, an active futures board and tight availability. Both Hem-Fir and Fir-Larch performed strongly.


• Stud pricing remained strong. Limited offerings kept buyers in the market looking for coverage. Wholesalers purchased strong volumes that in some cases will not be produced until the end of June. Yards often turned to wholesalers for coverage. As has been the trend, 2x4 9’ was again reported to be the strongest.


• The absence of Ponderosa Pine production has created something of a disjointed market. While the prices of neither industrial lumber nor boards have changed appreciably in many weeks, the demand for these products has been decent because of increased construction volumes. All 4/4 Selects and Commons are bound in an unchanging situation for the time being. Although demand remained decent, pine producers were bypassing boards in order to produce dimension lumber.


• Sales activity in Western Red Cedar varied little from prior weeks. Buyers often replenished at a steady pace, which was lackluster compared to other lumber markets. High prices were a concern among producers. Post and rails sold readily, with yards and home center outlets replenishing at a good rate.

Panels

OSB activity continued its momentum from last week, running on panic and driven by low inventories and transportation issues. Prices made double-digit jumps, and order files moved out.

• The Southern Pine plywood market remained on solid footing. Producers stretched order files well into next month, ranging from the weeks of June 4 to 18. With lead times extended out that far, mills raised quotes and sold at the higher levels.


• Western Fir plywood mills reported a good week of sales. As in past weeks, the market started out at a modest pace before picking up Wednesday and sustaining solid activity through Friday. Producers reported selling a healthy mix of truck and railcar volumes, which enabled them to stretch order files into the first couple of weeks of June.


• Activity picked up late week in Canadian plywood. Mills moved order files out a week, discounts dried up and prices firmed. The upcoming holiday weekend is traditionally busy for building material retailers in Canada, so sources are optimistic.


• Particleboard activity was particularly dull, as supplies remained plentiful. Producers often cited capacity levels above and beyond buyers’ needs for the lack of any upward price pressure.


• MDF sales activity was more intense than particleboard. Producers sold production more readily, generating order files extending a month and even longer.

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