RISI Crow's Market Recap
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: SPF producers approached the market in different ways, leading to ranges in quotes and prices. Key items were discounted more aggressively in some instances. Order files out into the middle of December and extended holiday downtime prompted other producers to maintain quotes or lower them moderately. Southern Pine traders reported a market mired in what they often attributed to seasonal effects. Among those weighing most heavily on demand side were inventory taxes, which seem to carry the most influence in Texas. Traders grew more bearish with respect to the remainder of December. Demand for Coastal species items was dull, but relatively decent balance between supplies and demand kept most prices somewhat stable. While production curtailments helped drive that balance, buyers did not perceive any shortage-driven need to buy. Inland markets were essentially quiet, with neither producers nor buyers reflecting any sense of urgency. This lack of energy was not based on weather or any event outside the industry. It was the result of buyer disinterest, combined with producer acceptance of the idea that lower prices would not bring greater sales. Stud pricing was more prone to discounts. Limited supplies, largely due to production curtailments this month, did maintain somewhat of a balance with mediocre demand levels. Producers and yards reported customers wanting to hold off purchases until they were assured deliveries would not occur until the new year. Ponderosa Pine and Radiata Pine industrials showed price stability once again, although significant volumes of stock were available for those who were looking. Ponderosa Pine Selects and Commons reflected a very flat profile, in both demand and price behavior. Producers seemed resolved to the fact that December could see some stock accumulate. A complete lack of urgency was reported across the industry. Western Red Cedar buyers looked to secure volumes for the first quarter but were wary of weak pricing. To sell to those customers looking for significant volumes next year, producers sometimes lowered prices considerably to alleviate a buyer’s downside price risk.
A price index of lumber and panels used in actual construction for Dec. 7, 2018.
Western: regional species perimeter foundation
Southern: regional species slab construction
Panels: Overall, OSB markets continued grinding down slower this week, although sources referenced a few volume deals done significantly under established price levels. Some traders suggested that the market was nearing break-even levels for producers. Suggestions that downtime is needed in the system grew louder. Southern Pine plywood sales activity remained dull, leading traders to describe the market as “ho-hum” or “so-so” or “flat.” Producers garnered enough orders to maintain decent lead times. Order files ranged widely throughout December. Western Fir plywood producers continued their struggle to sell production. Limited demand for a wide range of products kept downward pressure on many prices. Pricing for truckload volumes moved mildly lower while carload quantities sold at deeper discounts. Canadian plywood activity was mostly quiet again this week, with the majority of business filling holes or LTL. There was increasing concern expressed about log availability. There is a reluctance in the market to buy January wood. Particleboard and MDF buyers continued to purchase at a limited rate for December shipment. Fill-in volumes were popular, with some distributors taking into account year-end inventory taxes. Seasonal downtime in various demand sectors contributed to the moderate sales pace.
Lumber: SPF producers approached the market in different ways, leading to ranges in quotes and prices. Key items were discounted more aggressively in some instances. Order files out into the middle of December and extended holiday downtime prompted other producers to maintain quotes or lower them moderately. Southern Pine traders reported a market mired in what they often attributed to seasonal effects. Among those weighing most heavily on demand side were inventory taxes, which seem to carry the most influence in Texas. Traders grew more bearish with respect to the remainder of December. Demand for Coastal species items was dull, but relatively decent balance between supplies and demand kept most prices somewhat stable. While production curtailments helped drive that balance, buyers did not perceive any shortage-driven need to buy. Inland markets were essentially quiet, with neither producers nor buyers reflecting any sense of urgency. This lack of energy was not based on weather or any event outside the industry. It was the result of buyer disinterest, combined with producer acceptance of the idea that lower prices would not bring greater sales. Stud pricing was more prone to discounts. Limited supplies, largely due to production curtailments this month, did maintain somewhat of a balance with mediocre demand levels. Producers and yards reported customers wanting to hold off purchases until they were assured deliveries would not occur until the new year. Ponderosa Pine and Radiata Pine industrials showed price stability once again, although significant volumes of stock were available for those who were looking. Ponderosa Pine Selects and Commons reflected a very flat profile, in both demand and price behavior. Producers seemed resolved to the fact that December could see some stock accumulate. A complete lack of urgency was reported across the industry. Western Red Cedar buyers looked to secure volumes for the first quarter but were wary of weak pricing. To sell to those customers looking for significant volumes next year, producers sometimes lowered prices considerably to alleviate a buyer’s downside price risk.
A price index of lumber and panels used in actual construction for Dec. 7, 2018.
Western: regional species perimeter foundation
Southern: regional species slab construction
Panels: Overall, OSB markets continued grinding down slower this week, although sources referenced a few volume deals done significantly under established price levels. Some traders suggested that the market was nearing break-even levels for producers. Suggestions that downtime is needed in the system grew louder. Southern Pine plywood sales activity remained dull, leading traders to describe the market as “ho-hum” or “so-so” or “flat.” Producers garnered enough orders to maintain decent lead times. Order files ranged widely throughout December. Western Fir plywood producers continued their struggle to sell production. Limited demand for a wide range of products kept downward pressure on many prices. Pricing for truckload volumes moved mildly lower while carload quantities sold at deeper discounts. Canadian plywood activity was mostly quiet again this week, with the majority of business filling holes or LTL. There was increasing concern expressed about log availability. There is a reluctance in the market to buy January wood. Particleboard and MDF buyers continued to purchase at a limited rate for December shipment. Fill-in volumes were popular, with some distributors taking into account year-end inventory taxes. Seasonal downtime in various demand sectors contributed to the moderate sales pace.