RISI Crow’s Market Recap for May 25

A price index of lumber and panels used in actual construction for May 25, 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

After a strong finish to the week prior, SPF traders came back from Monday’s Canadian holiday to a relatively quiet market. Sales at both eastern and western Canadian mills slowed considerably. Buyers were keenly aware of an extended downturn in lumber futures, creating significant anxiety in a market where high-priced volumes will not arrive at yards until July. Traders often considered the downturn in futures inconsistent with the cash market, citing strong demand for lumber.

• The trading pace in Southern Pine remained brisk. Spotty claims of sales activity not quite as frantic as prior weeks were heard, but buyers continued to replenish inventories at a strong rate.


• Sales activity in Coastal species slowed early, as several days of sharply downward futures moves shocked the market. By the end of the week, more traders turned their attention toward the long holiday weekend. Prices moved higher.


• Inland lumber trading was hampered most of the week by indecisive indicators from the futures board, but when Thursday showed strong upward motion from the board, lumber buyers responded with strong order placement.


• Stud prices continued to march higher, although not at the rate as seen in prior weeks. Double digit gains were common among 2x4 items. Much of the price strength was attributed to continuing tight supplies across a number of items.


• Ponderosa Pine industrials remained stable in price, in concert with other pine products. The 6/4 Ponderosa Mldg&Btr has hinted at strength over the last few months, but real action has not developed. Ponderosa Pine boards continued to show the “frozen in place” attitude of recent weeks. Prices are virtually unchanged, with the exception of 1x12 #3 Common, which is softer.


• Western Red Cedar producers often reported steady sales, although somewhat pedestrian compared to last year. Traders noted that buyers were a bit more anxious to receive shipments now that Memorial Day weekend was quickly approaching.

Panels

Through most of North America, the pace slowed in OSB. Holidays in Canada and the US served to quiet activity, while the market digested wood purchased in the past weeks. Most sources described solid conditions, saying inventories were still thin in the system and jobs busy.

• Sales activity in the Southern Pine plywood market was most often reported “steady” to “a little slower.” Those traders seeing a slight downturn in sales offered a variety of reasons, including high prices, the approach of a long holiday weekend and a forecast of significant rains in the Southeast.


• Reports of sales activity varied in the Western Fir plywood market, but when all was said and done, prices continued to climb higher. Lead times in the weeks of June 11 and 18 were typical.


• Canadian plywood markets firmed this week following the holiday, with trading and inquiries reported moderate to strong. Sources felt the market is underbought and are bullish going into next week. Forest fires active in BC served to fuel the notion that supply could tighten as log flows are again threatened.


• No big changes occurred in the pace of particleboard and MDF sales activity. Yards and downstream manufacturers purchased steady volumes, enabling most mills to maintain order files.

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