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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 April 6, 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: Dangling discounts in front of buyers, eastern SPF producers began the week looking for takers. Western producers were not as aggressive, holding quotes near last week's levels but admitting to carrying thin order files. By Thursday morning, an upward futures move and rumors of an order out of China brought more customers into the market. Production outpaced demand in the Southern Pine lumber market, forcing producers to discount #1 and #2 dimension prices for a third consecutive week. Signs of market improvements did appear. Truck availability continued to tighten. Low grade supplies remained tight. Sales activity on the dry side of the Coastal species lumber market increased in the latter half of week, helping to shore up those prices discounted early. In comparison, green prices could not gain any traction, weakened by scarce demand. The market for Inland species lumber remained on fairly stable ground, in spite of another week of modest sales activity and early discounting. Producers did not feel much urgency to book business. Eastern White Pine producers reported order files out to the week of April 23 and steady sales of both Standard and Industrial items. Suggestions that the market for Ponderosa Pine Selects and Commons would soften when more production came on line have been unfounded. As production at Inland mills has increased, the market has absorbed the increased production, with little downside impact on prices. Ponderosa Pine moulding and shop producers reported their customers were returning to buy more wood. Sales of Shop grades improved slightly. Orders for Radiata Pine Mldg&Btr increased. Prices have not increased, but producers were keeping a close eye on activity. The Western Red Cedar market continued to perk up, as buyers looked to cover some needs with more urgency. The overall mood in the market was improved.

Panels: OSB producers lowered their asking levels in order to bring buyers from the sidelines. Buyers responded and made enough purchases to build mill order files and firm prices. Discounts offered early in the week dried up by week's end. Elevated sales activity in the Southern Pine plywood market allowed mills to firm rate sheathing prices at discounted levels after moving order files through the week of April 9. Volumes of Western Fir plywood flowed from mills at a greater pace in the latter stages of the week after mills offered deep discounts. Canadian plywood producers were able to hang on to prices through another week of light sales volumes. Order files continued to help bolster mill asking levels. Prices from mill to mill for both particleboard and MDF continued to rise unevenly. Recent resin price increases are placing more upward pressure on board prices. Most buyers are absorbing the higher costs with little or no push-back.

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