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 trading was light. Producers and wholesalers often called sales “a struggle.” The prior week’s uptick in activity did not provide producers with enough order file to fend off counters. Buyers continued to lower their high-priced inventories and purchase sparingly. Downward pressure on Southern Pine prices persisted. Into the fourth quarter, buyers are reluctant to build inventories as of yet. New mill startups also concerned buyers. Shipments out of dealers’ yards remained constricted by wet weather, this week brought on by Hurricane Michael. Demand at the mill level continued to lag Coastal species production. The supply/demand imbalance prompted traders to consider whether producers might cut back production. Traders again reported competition from Canadian mills shipping Doug Fir into the US. Inland mill order files and prices are widely spread, resulting in some very large price discrepancies on many items. Buyers continued to show reluctance to step into the market with any volume. In line with other framing lumber items, stud prices continued to decline. Mills needing to move a particular product negotiated deals after lowering quotes, generating a range of prices. Yards seeing thinning stocks often waited when possible to purchase, sensing the possibility of more downside risk. The general tenor of the industrial lumber market was little changed, except for a few modest price changes in Shop items. Mldg&Btr showed a tenuous balance, with demand and supply in a rough parity. Shop is readily available for those seeking #3 Shop, and P99 is still very abundant. Ponderosa Pine Selects continued to show solidity in all ways, demonstrating no changes in either prices or pace of demand. A good deal of fluidity existed in the realized prices of 4/4 Common boards, although most producers showed little or no change in their lists. Interest in purchasing Western Red Cedar remained limited. High prices and the potential for downside risk left buyers cautious. Orders consisting of heavy mixes were popular among buyers.
A price index of lumber and panels used in actual construction for Oct. 5, 2018.
Western: regional species perimeter foundation
Southern: regional species slab construction
Panels: Downward price corrections for OSB were sharp this week, despite Hurricane Michael’s devastating impacts in the Southeast. With any hope of a fall buy in the rearview mirror, panel inventories were kept low and buying patterns just-in-time. The market was viewed as overproduced by contacts. Southern Pine plywood traders expecting a push from Hurricane Michael were surprised it did not provide more energy to the market. Unlike last year, when back-to-back hurricanes, Harvey and Irma, spurred the market, Michael did little, if anything, to boost sales. Demand at the mill level continued to lag Western Fir plywood production, again forcing prices lower. Business was often described as “difficult,” in part due to buyers’ resistance to purchasing. Negotiated price levels were common. A slightly improved trading pace Thursday was reported. Canadian plywood activity was quieter this week, though the market stabilized. A gas line explosion Tuesday disrupted production at two major plywood mills, and some veneer facilities. Sources expect operation to return in full early next week, and said the event did little to motivate buyers. Particleboard and MDF producers continued to sell solid volumes, enabling most mills to keep order files at a comfortable length. Most producers kept prices firm. Some lower priced particleboard in the West was evident.
Lumber: SPF trading was light. Producers and wholesalers often called sales “a struggle.” The prior week’s uptick in activity did not provide producers with enough order file to fend off counters. Buyers continued to lower their high-priced inventories and purchase sparingly. Downward pressure on Southern Pine prices persisted. Into the fourth quarter, buyers are reluctant to build inventories as of yet. New mill startups also concerned buyers. Shipments out of dealers’ yards remained constricted by wet weather, this week brought on by Hurricane Michael. Demand at the mill level continued to lag Coastal species production. The supply/demand imbalance prompted traders to consider whether producers might cut back production. Traders again reported competition from Canadian mills shipping Doug Fir into the US. Inland mill order files and prices are widely spread, resulting in some very large price discrepancies on many items. Buyers continued to show reluctance to step into the market with any volume. In line with other framing lumber items, stud prices continued to decline. Mills needing to move a particular product negotiated deals after lowering quotes, generating a range of prices. Yards seeing thinning stocks often waited when possible to purchase, sensing the possibility of more downside risk. The general tenor of the industrial lumber market was little changed, except for a few modest price changes in Shop items. Mldg&Btr showed a tenuous balance, with demand and supply in a rough parity. Shop is readily available for those seeking #3 Shop, and P99 is still very abundant. Ponderosa Pine Selects continued to show solidity in all ways, demonstrating no changes in either prices or pace of demand. A good deal of fluidity existed in the realized prices of 4/4 Common boards, although most producers showed little or no change in their lists. Interest in purchasing Western Red Cedar remained limited. High prices and the potential for downside risk left buyers cautious. Orders consisting of heavy mixes were popular among buyers.
A price index of lumber and panels used in actual construction for Oct. 5, 2018.
Western: regional species perimeter foundation
Southern: regional species slab construction
Panels: Downward price corrections for OSB were sharp this week, despite Hurricane Michael’s devastating impacts in the Southeast. With any hope of a fall buy in the rearview mirror, panel inventories were kept low and buying patterns just-in-time. The market was viewed as overproduced by contacts. Southern Pine plywood traders expecting a push from Hurricane Michael were surprised it did not provide more energy to the market. Unlike last year, when back-to-back hurricanes, Harvey and Irma, spurred the market, Michael did little, if anything, to boost sales. Demand at the mill level continued to lag Western Fir plywood production, again forcing prices lower. Business was often described as “difficult,” in part due to buyers’ resistance to purchasing. Negotiated price levels were common. A slightly improved trading pace Thursday was reported. Canadian plywood activity was quieter this week, though the market stabilized. A gas line explosion Tuesday disrupted production at two major plywood mills, and some veneer facilities. Sources expect operation to return in full early next week, and said the event did little to motivate buyers. Particleboard and MDF producers continued to sell solid volumes, enabling most mills to keep order files at a comfortable length. Most producers kept prices firm. Some lower priced particleboard in the West was evident.