Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for April 29, 2011

*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: SPF mills across Canada struggled to sell production into a distribution system plagued with slow takeaways. Mills in the West struggled just to fill allotted railcars. Single-digit discounting dominated the Southern Pine lumber market. Weakest among the dimensions was still 2x6 #2, if not for the depth of its discounts, then for the difficulty mills had moving the item. Liquidity generated from considerable discounts reduced dry lumber buildups at Coastal species mills. Not all mills were willing to participate at the low price levels. Green Doug Fir sales were sluggish, but most producers were not forced to lower prices severely. Inland species lumber producers have seen their market prices put under intense pressure in the last two weeks. The primary sources of this pressure have been lumber futures trading and soft prices for Canadian and Coastal lumber. Ponderosa Pine 5/4 Mldg&Btr remains at $1,350. With regard to Shop, 6/4 is slightly stronger in #2&Btr than is 5/4, but neither is aggressive in price. Although some producers show volumes of #3 narrows to move, others are content to maintain a stable price picture. All #4 Common items are unchanged and firm, as are Selects for the time being. Both ESLP and Idaho White Pine boards are firm at established levels. Eastern White Pine has been waiting for the weather to catch up with the market, which it appears to be doing in a gradual way. Radiata Pine Mldg&Btr and Shop are on hold with regard to prices. Western Red Cedar prices as a whole remained fairly static. Demand was steady but light. Sales to big-box stores were consistent.

PANELS: Western Fir plywood mills reported slightly greater sales volumes than the previous few weeks, but not enough to keep CDX and underlayment prices from drifting lower. Southern Pine plywood sales increased in the latter half of the week. Early price weakness in rated sheathing firmed as producers moved order files as far as the week of May 9. While some discounting has taken place, most OSB producers are trying to keep numbers firm. The current levels erase any real downside risk, but buyers do not consider these investment levels because they do not need wood. As reflected in reported Canadian plywood prices earlier this week, discounting did result in lower numbers, with C$306 being the new baseline. Particleboard and MDF prices in both the West and South are stable and firm, although portions of the West remain inordinately competitive.

Source: RISI's Crow's Weekly Market Report

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