Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for May 11, 2012

*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: After a strong couple of weeks of sales, trading in the SPF lumber market slowed. Price increases attained the Friday prior made up much of the gains. Price levels not achieved since January 2011 generated an air of cautiousness among buyers. The perception that Southern Pine lumber buyers were exercising more caution as prices again moved higher was prevalent. Despite buyers' approach, demand and mill order files were strong enough to maintain upward price pressure. Coastal species lumber mills experienced a quieter week of sales, but there was enough momentum in the market to edge prices higher. Any weakness in dry was found at the secondary level, where wholesalers sold quicker shipping volumes below replacement costs. Sales volumes were lighter than last week at Inland species lumber mills, but that was less a product of demand than a lack of random tallies and two to three week or longer order files. As available tallies at mills became scarcer, buyers turned to secondaries for their needs. Limited supplies of Idaho White Pine boards kept that market strong. A change in that situation does not appear as if it will happen soon. Good order files for Eastern White Pine, along with good sales, kept prices firm. Order files out two weeks kept ESLP prices solid or moving slightly higher. In Moulding and Shop, Radiata Pine lumber prices remained firm. Ponderosa Pine price levels remained strong but unchanged, with #3 Shop and P99 showing a little more strength than the rest of the field. Demand was uneven yet steady overall for Western Red Cedar. Producers tended to note significantly better sales volumes than a year ago but lamented price levels.

Panels: OSB producers maintained the momentum in spite of a slower start to begin the week. By week's end, eastern markets had participated and prices increased, as order files were extended. The North Central and Southwest remained active, as did the Far West. Eroding rated sheathing order files at Southern Pine plywood mills on the Eastside generated moderate discounting early. Increased sales late helped firm those prices. Western Fir plywood traders experienced what was sometimes described as "a fairly uneventful week." A lack of volumes owned by wholesalers and some mill order files extending into at least the week of May 21 enabled mills with shorter lead times to sell more readily. Canadian plywood markets continue to maintain a steady upward trend. The Prairies have been steady throughout the run, and now eastern markets are beginning to improve. Particleboard and MDF sales were solid. Mill order files were sometimes reported all the way out until the latter half of June. Some higher prices were used to manage order files.

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