Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Oct. 9, 2015

*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 in the SPF market remained strong. Traders often credited gains in futures throughout the week for at least part of the market’s vigor. Concerns over any potential increase in volumes entering the US from Canada if the Softwood Lumber Agreement expires Oct. 12 seemed to fade. Southern Pine sales activity remained solid both at mills and throughout the distribution chain, leading to higher prices for most dimension lumber items. Mills’ order files extended two to three weeks in many instances. The Coastal species lumber market remained liquid, allowing producers to maintain prices for the most part and gently raise a few prices. Inland dimension recorded a week of little, if any, price change. Most producers reported that the market is not weak; it is merely quiet and flat. Stud pricing was predominantly flat for a second consecutive week in lackluster trading. A few discounts did appear, particularly in 8’, while 9’ and 10’ pricing remained firmer than overall and gained in some instances. Radiata Pine is very stable in Mldg&Btr, and no extra is available. Shop, however, did undergo some $10 adjustments last week but no further declines this week. Ponderosa Pine Shop prices made adjustments of $10 and $20 last week. Those changes were still reported as current, but the volume of Ponderosa Pine available is still abundant. Demand for Ponderosa Pine Selects and #2 Common have been sufficient to keep those grades stable in price and fill the bins of home centers. Buyers and sellers of Western Red Cedar continued to experience a market that is winding down prior to the winter months. Sporadic sales often consisted of mixed loads intended to plug inventory holes or cover hand-to-mouth needs.

Panels: OSB activity and pricing took off like a shot this week, with numbers leapfrogging every day. Prices jumped as much as $30 in some cases, and for the first time in recent memory, 7/16” mill levels exceeded $200. Order files are generally into the last week of October and the first week of November. Southern Pine plywood producers began the week lowering prices and negotiating with buyers, trying to sell volumes left in the week of Oct. 12. Considerably more buyers entered the market Thursday, allowing mills to floor rated sheathing prices and bump up quotes a few dollars. Buyers again covered Western Fir plywood needs, purchasing good volumes. Mills came off their quotes a few dollars in many instances to help keep volumes flowing and established order files extending into the week of October 19. Activity in the Canadian plywood market was slow this week, again, leaving sources wondering what happened to the “fall buy.” Order files are still into the week of October 19 for most producers. Buyers purchased steady volumes of particleboard. Any notable pickup in fall demand has yet to materialize. MDF sales in the East remained slow, and discounts were available in some instances. The market in the West was stronger, with mills able to maintain order files.

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