Crow's Construction Materials Cost Index
Originally published by: RISI — September 19, 2011
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A price index of lumber and panels used in actual construction for Sept. 16, 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: After a couple of weeks of solid, steady demand, the sales pace in the SPF lumber market subsided. The expiration of September's futures contract at a level considerably below the 2x4 #2&Btr cash price prompted some ex-pitting. Buildups of dimension lumber at Southern Pine lumber mills were drawn down enough for mills to start testing higher prices early. Enough buyers participated at the higher levels to make quotes $5 to $10 above the prior week's market levels stick. Balance between supply and demand in the Coastal Species lumber market either improved or was enough in favor of demand to position prices moderately higher. Some producers focused on keeping an order file at arm's length, while others were more aggressive with raising prices. Buyers of Inland lumber were willing to pay asking prices for good tallies that could ship quickly. Late shipments of carloads were a problem for some buyers who had to look elsewhere for prompt truckloads to fill in. Reports of increased inquiry for Ponderosa Pine 4/4 boards circulated. Ponderosa Pine producers in industrial grades reported a somewhat subdued market. Idaho White Pine sales were steady, with Sterling grade still the bright spot in the market. Eastern White Pine producers reported slow sales for Selects, but better business from box stores for Premium. Western Red Cedar sales into regions that received a reprieve from heat were notable, while other areas where heat persisted were not as active. Mills continued to dial back production, but were optimistic about a slight bump in sales activity in September and maybe October.
Panels: OSB sales volumes seemed to be close to parity with production levels. Mill order files of a week or so were enough to keep quotes unchanged from previous levels. The announcement of mill closures by November from a major plywood producer sent Southern Pine plywood buyers scrambling for coverage. Producers exited the market at various intervals to "catch their breath," while buyers turned to wholesalers for quicker shipping volumes. Western Fir plywood producers reported increased sales activity as the week progressed. Some of the added demand in Southern Pine seeped into the West. Canadian plywood mills carried order files into the week of Oct. 10 for most items. Although prices have not moved much beyond previous sales levels, producers continue to test the waters with higher levels. The month is not over, but expectations for improved market activity in particleboard and MDF in September have not been met. Customers continued to have little problem finding volumes that could ship within a two week period.