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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 May 24, 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.

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Lumber: Weakness in the SPF lumber market created a bevy of lower selling prices at the mill level, dependent on what a particular mill needed to sell, how quickly those volumes needed to move and what buyers were willing to pay. Production continued to outpace demand in the Southern Pine lumber market, forcing most dimension prices lower. Producers often sold mixed truckloads at a sporadic pace. Prices in the Coastal species lumber market declined. Perceptions regarding an oversupplied market remained widespread, and a few traders questioned whether mills might need to cut production. Control of the Inland species lumber market remained in the hands of buyers, who made their purchases very selectively. Weakness in futures, as well as low prices for SPF, were mentioned as contributing factors to soft prices. Most purchases were discounted The market for Radiata Pine Mldg&Btr was firm, steady and balanced, with little change in pricing. Ponderosa Pine Moulding and Shop producers reported limited supplies of wood, although buyers indicated they were seeing more offerings from mills. Weak lumber futures contributed to the bearish attitude existing throughout much of the market. Market activity for Ponderosa Pine Selects and Commons remained lackluster. Mixed loads were the norm, and most came with a counter to mill asking levels. Activity for ESLP boards remained steady. Supplies of Industrial grade Eastern White Pine were tight and buyers continued to look for coverage. A wide range of prices for Idaho White Pine were reported. Western Red Cedar producers experienced various levels of sales activity. Growing takeaways from distribution and retail yards prompted replenishment buying from mills, while other yards filled-in with highly mixed volumes.

Panels: In spite of efforts by producers to firm OSB prices up, weakness in the market persisted. Contract wood continued to undermine mills’ efforts to build order files based on open market sales. The Southern Pine plywood market remained weak but not to the degree as in previous weeks. Buyers continued to purchase conservatively, cautious of the potential for more downside in prices. Western Fir plywood producers did what was needed to sell volumes while trying not to give too much ground in the way of pricing. Buyers remained cautious, purchasing prompt shipping volumes to fill immediate needs. The market for Canadian plywood continued to struggle. Distributors, for the most part, concentrated on moving contract commitments. Even though several producers were not laying up sheathing, the impact was negligible on market prices. Particleboard producers in the Southeast continued to sell strong volumes. Less availability prompted eastern particleboard buyers again to look west to those plants for coverage. MDF sales were steady and prices remained very firm.

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