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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 Dec. 6, 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: Greater urgency to sell production forced SPF lumber mills to lower prices more aggressively to locate trading levels. Some success was achieved at $20 below the prior week’s levels. Buyers needing to purchase did so sparingly, while others saw the weakness as a reason to remain on the sidelines. Sales activity in the Southern Pine lumber market was quiet and described by a few producers as “extremely slow.” Two major contributors to the pause in demand are the whittling down of yard inventories prior to year-end and a major cold front covering much of the U.S. Buyers shied away from the Coastal species market, making it difficult for producers to sell much without lowering prices $15 to $20 -- and sometimes more. Lower prices added more fluidity to trading, but producers still struggled to sell production. Inventories of Inland species lumber were light throughout the system. Producers had little in the way of offerings, yards reported limited supplies of straight lengths and wholesalers were out of stock at many of their reloads. Radiata Pine sellers reported steady sales for loads that will deliver in January. Demand for Ponderosa Pine Shop continued to outpace availability, and prices remained strong. Buyers called in any favors they may have with producers in order to garner coverage. Although some producers reported a quieter tone to the market, Ponderosa Pine boards continued to move easily. Any offering of #2&Btr that shipped quickly was sold with little effort. Eastern White Pine producers reported market activity was “still strong,” with order files out several weeks. ESLP sales remained steady, with demand focused on #2&Btr. Western Red Cedar demand was typical for the season. Producers carried little inventory and prodded customers for 2014 projections to make sure enough inventory was available in the spring.

Panels: OSB sales volumes were light in both eastern and western markets. Producers continued to offer shipments for next week, but many were unwilling to offer much in the way of price concessions. Sales activity in Southern Pine plywood was lackluster. Negotiated pricing for some items added to the feel of a moderately weaker market, keeping buyers from purchasing whenever they could wait. A “slow week” was how most Western Fir plywood traders described sales activity. Thin order files forced mills to lower prices wherever necessary, but they did so grudgingly, citing high log and veneer costs. Participation out of the East was minimal. Market activity for Canadian plywood remained light, but producers reported selling a few loads. Mill order files into the first week of January kept many buyers on the sidelines. Those who went looking for quicker shipments were mostly unsuccessful in their attempts. Demand for both particleboard and MDF remained pedestrian, with a seasonal lack of energy in markets. Market participants continued their optimistic outlook for the first quarter of 2014.

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