Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for April 25, 2014

*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. 

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Lumber: SPF lumber mills continued to sell volumes at moderate discounts in an effort to bolster order files, some reporting a slightly firmer approach to prices by the end of the week. Enhanced sales activity early was due to a strong upward move in futures on Monday. After five or six weeks, depending on the item, of falling #2 prices in Southern Pine dimension lumber, most prices gathered upward momentum. Producers reported improved sales, some of it due to improving demand in northern regions of the U.S. Coastal species lumber prices were mixed, depending on the amount of demand each item drew. Slower green Doug Fir sales prompted discounts for most items. In dry, producers experienced improved sales activity, particularly at midweek. Inland species lumber traders used words like “uneventful” and “subdued” to describe the markets this week. Offerings of Radiata Pine Mldg&Btr from New Zealand were limited and most were spoken for as soon as they were offered. Ponderosa Pine producers reported good sales volumes and firm pricing for #2 Shop, especially for 6/4. Ponderosa Pine board producers avoided the downward price adjustment many predicted would come when mills began to process their Ponderosa Pine log decks to avoid the onset of spring blue stain. Eastern White Pine producers reported strong inquiries and sales for both Standard and Industrial grades. Some mills reported order files out 3 weeks or more, and others indicated they oversold Standard and Industrial. End users in northern states perceived last week’s snow flurries as winter’s final gasp and began to unleash pent-up demand for Western Red Cedar. Retailers in the upper Midwest reported strong sales, prompting them to reenter the market to purchase more volumes.

Panels: OSB markets in regions of the U.S. and western Canada saw inquiries and sales volumes increase. Eastern Canada did not get the love that other regions did. Traders reported a busy week. Southern Pine plywood mills experienced strong sales activity, enabling them to push prices higher. With mills selling firmly in the week of May 12, and a few out a week further, some went off the market to harness order files. Western Fir plywood mills received a burst of sales activity from buyers looking to replenish inventories. Despite the acceleration in prices and demand, buyers purchased conservatively. Wholesalers were wary about buying back in at the higher price levels. What started out as a quiet week, with some Canadian plywood market players taking the Monday after Easter off, ended up with a flurry of sales at varying price levels. As mills booked business and order files extended, discounts began to dry up. Particleboard sales at eastern mills remained steady, and mills often sold another week of production or more. Mixed reports came out of the West, where moderate sales combined with strong mill takeaways. MDF sales were lackluster, and buyers had little trouble securing needs.

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