RISI Crow's Market Recap

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RISI Crow's Market Recap

10/29/2018
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 the prior week’s slight uptick in sales activity, the SPF market grew quiet again. Mill order files thinned, and significant discounts were used to move quicker shipping volumes. Buyers often perceived more downside even as western 2x4 #2&Btr sold around the $300 mark. Southern Pine lumber demand remained tepid, continuing to place downward pressure on prices. Rains from Hurricane Willa swept across Texas and Arkansas at midweek and then moved east, limiting consumption in that region. While some mills in the West are cutting back production, curtailments in the South have yet to happen. Coastal species sales activity was limited. Carryover from the modest increase in demand the week prior was nonexistent. Mills tended to lower quotes conservatively and negotiated deals when urgency to move a particular item developed. Inland lumber producers reported an inconsistent week, marked by good action in some areas but a virtual standstill in some usually hot regions. Prices followed the path of decline, dropping off a bit more in most items but focused on the narrows. Stud pricing remained sloppy, although declines did not move as sharply downward as prior weeks. Low priced European studs remained firmly entrenched in the market. Industrial lumber continued to show marked weakness in Shop outs and P99. Both 5/4 and 6/4 Mldg&Btr remained acceptably balanced, with no price changes. The #2 Shop was also consistent and stable in price; #3 Shop was abundant and could be readily purchased at a discount. Ponderosa Pine Selects and Commons were marked by “a spotty performance,” especially in the 4/4 Common items. Selects were stable and unchanged, though not notably active. Commons were strongest in #2, sloppy in #3, and dropping further in #4. Some Western Red Cedar producers reported a moderate gain in sales activity and interest among buyers regarding product availability in the first quarter of next year. Buyers continued to fill in inventories where necessary, often purchasing mixed truckload volumes. Wide widths were both tighter in availability than narrows and more sought after.

A price index of lumber and panels used in actual construction for Oct. 26, 2018.

Western: regional species perimeter foundation
Southern: regional species slab construction



Panels: OSB markets continued trying to find a bottom this week. Activity started out the week on a positive note but went quiet by Thursday. Attitudes were mixed, from guardedly positive in the West to downcast in the East and South. Southern Pine plywood pricing continued to sag under the weight of production outpacing demand. Buyers showed limited interest in buying while mills exhibited urgency to sell. That combination created deep discounts and a variety of negotiated levels. Price pressure in Western Fir plywood remained downward. Sales activity remained dull, forcing producers to lower quotes and listen to offers. Production cutbacks and curtailment announcements helped give the market a moderately better tone. Canadian plywood activity followed through with another strong week. Buyers stepped in to bolster thin inventories, order files moved out, and discounts disappeared by the week’s end. Most order files range from the week of Nov. 19 to Nov. 26. Mill order files for MDF and particleboard producers remained in good shape. Downtime at some mills in the coming weeks is expected to tighten the overall supply somewhat heading into the end of the year.