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Market Recap: RISI Crow's Construction Materials Cost Index

A price index of lumber and panels used in actual construction for Feb. 15, 2013

*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 trading was moderate and steady, which led to higher prices for the second consecutive week. Volumes sold were not near those sold the week prior. The need to purchase again outweighed caution generated by high prices. Sales in the Southern Pine lumber market slowed compared to trading the prior week, when buyers purchased much of the market's February supply. Order files extending two to four weeks and sometimes longer and enough sales activity to sell another week of production prompted higher prices. Coastal species lumber continued to sell from mills at a strong pace, and secondaries moved their wood through the system steadily. Higher prices prompted some pushback from buyers, but the need to purchase often took a backseat to any protestations. Strength and control of the Inland species lumber market remained in the hands of producers. Limited on hand inventories and order files as far out as mid-March, along with continued buyer interest, allowed mill prices to increase. Offerings of Radiata Pine were light for Mldg&Btr and practically non-existent for Shop grades, as producers were able to garner better returns in markets outside North America. Ponderosa Pine producers reported modest inquiry and sales, as buyers stepped in to cover some of their needs. Supplies of Ponderosa Pine boards remained thin and producers priced defensively. Eastern White Pine reported business was back to normal after the big snowstorm. They reported steady sales and firm pricing. Industrial was difficult to find. Western Red Cedar mills continued to ship orders to customers placed back in late 2012 and took new orders for shipment as far out as June. A fair amount of inquiry for quicker shipping product circled the market, although producers had little to offer.

Panels: The OSB market in all regions continued to strengthen. Mill order files into late March, or even early April, were reported. Buyers turned to secondaries with contract wood to cover much of their immediate needs. Steady sales sent Southern Pine plywood prices higher. Wholesalers purchased moderate volumes with lead times out into mid March after selling near replacement costs. Yards continued to purchase at a steady pace. The sales pace in the Western Fir plywood market slowed considerably. Order files extended into early March, but spotty volumes of various items were still available for the week of Feb. 25 and as early as Feb. 18. The volume of sales in Canadian plywood was light. Buyers who had made earlier purchases stayed on the sidelines. However, distributers reported good product flow from their yards. Aside from the spotty surge in sales occurring at a few mills, particleboard demand remained on par with previous weeks this year. In MDF, recent price increases have taken hold, establishing new market price levels.

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