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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 July 26, 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: The SPF market was not as “peppy” as in previous weeks, but limited availability left prices firm to higher. A combination of recent sales to China, volumes allotted for overseas shipments in August and September and summer shutdowns at mills in eastern Canada all contributed to fewer mill offerings. Good demand levels in the Southern Pine lumber market, despite significant caution among buyers, continued to absorb mill production, keeping upward pressure on prices. Mill sales in the Coastal species lumber market remained strong, leading prices to higher levels. Buyers continued to replenish inventories, experiencing good demand. Most Inland mills report their inability to fill numerous customer requests. Mill order files are solid, extending out two to three weeks on Std&Btr/#2&Btr dimension. Radiata Pine sellers report that they are also getting keen demand for Shop lumber, but many of them cannot secure much stock to sell. Ponderosa Pine demand has converged to produce pressure on both 5/4 and 6/4 Shop at the same time, with 6/4 especially tight. Demand for Ponderosa Pine 4/4 boards is good; supplies have become more limited. Eastern White Pine producers report that demand is good for highly mixed truckloads of material. Mills have low inventories and strong order files, which puts them in an enviable position with regard to prices. Idaho White Pine producers are pushing for stronger prices for their new production Several Western Red Cedar producers reported improved sales and better inquiry levels, some suggesting the market was late arriving this year. Sales to customers in the Midwest improved while demand out of the Pacific Northwest was steady.

Panels: OSB has become a muddled picture, with distributors and wholesalers attempting to catch up with mill pricing and failing to do so. Most regions quieted considerably from their pace of a week ago. Although not as active as in previous weeks, enough sales took place in the eyes of Southern Pine plywood producers to raise rated sheathing prices $10-15. While some mills reported selling a week’s worth of production, order files generally remained at the midpoint of August or a week beyond. Traders had varying opinions on when and how much market activity in Western Fir plywood improved, but by the end of the week, demand was certainly better and prices were firmer and higher. Activity picked up strongly in Canadian softwood plywood again, sending mill prices upward in steady increments. Those who were able to purchase plywood at discounts early in the week were forced to buy back in, if they did so, at levels 1% to 4% above the previous mark. Particleboard and MDF orders remained down from June, but mills continued to see some slight improvements as the market moves closer to August.

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