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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 March 14, 2014

*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: Supply buildups at SPF lumber mills and how those volumes would eventually influence the market became a greater concern among traders. Mills continued to receive a small fraction of railcars needed to load the week’s production. Mediocre trading activity left Southern Pine lumber mills with eroding order files and buyers sensing a weakening marketplace. Wholesalers sold volumes well below replacement costs, adding to the perception of a more vulnerable market. Weather remained the prime driver in a market. Decent demand in the Coastal species lumber market kept most dry prices flat but firm or moving slightly higher. Green prices tended to sag under the weight of limited interest from buyers. Lumber prices in the Inland region are firmer. Producers have been focused on narrows, due primarily to the type of log they have been processing. This has created some tight supplies of all 2x8 and wider dimension. Ponderosa Pine Mldg&Btr remains in the balanced state that it has shown for the last year and more. Demand and production are well enough equalized to keep prices stable. Producers of Ponderosa Pine 4/4 boards are unanimous in their assessment that, “The demand for boards is good.” Hottest of all the board products is Ponderosa Pine #3 Common. Even producers who have no board production at this time are being asked daily for products, in the hopes that something might develop. Eastern White Pine continues to be very stable in price, with core customers being the focus of producers’ attentions. ESLP remains steady, with modest adjustments, especially in the lower grades. Western Red Cedar buyers desperate for deliveries swapped railcar shipments for truckloads when possible, depleting flatbed availability. Buyers in the Northeast and Upper Midwest remained quiet. 

Panels: Some sizable cracks have appeared in OSB markets, driven primarily by the needs of wholesalers to move wood. This is the case in most regions, including the Pacific Northwest, most of the West and parts of Canada. Discounting is common on the secondary level. The Southern Pine plywood market continued to display balance between supply and demand, even as much of the Northeast and Midwest remained locked in winter weather. Producers edged order files out another week, now into March 24, and maintained prices levels. Order files at Western Fir plywood mills eroded to the point where producers began to negotiate sheathing prices. Aware of the potential for a stronger market as weather improves prompted producers to hold quotes. From there, CDX sales occurred at levels $5-15 lower. Canadian plywood appeared to firm on Tuesday after some discounted sales earlier. Pressure on prices, a result of additional costs incurred by producers, continued to thread its way through particleboard and MDF markets. Some producers have informed their customers of upcoming price increases, many of the increases not taking place until the end of this month or early April.

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