Random Lengths structural panel composite drops US$7 to US$295/msf; quiet but steady OSB sales offset sharp plywood price declines of up to US$30

Wendy Lisney

LOS ANGELES , October 23, 2011 (Forestweb) – The Random Lengths structural panel composite has dropped US$7 (2.32%) from $302 per thousand sq. ft. (msf) in the week ending Oct. 14 to $295/msf on Friday. Compared to the price reported at this time last year ($276/msf), the composite is $19 (6.88%) higher.

The decline was largely driven by steep drops in plywood prices, which contrasted to relatively stable levels in OSB markets on quiet sales. Order files were reported into the weeks of Oct. 31 or Nov. 7, and the reported price of the benchmark grade, OSB North Central 7/16 in., was $205/msf – up $10 (5.13%) from the previous week. The benchmark grade is now $20 (10.81%) higher than the price reported at this time last year ($185/msf).

The OSB composite held at $203/msf for a second straight week, and $6 (2.87%) below the price reported at this time last year of $209/msf.

Pricing patterns in plywood markets were very different as several Southern producers opened to large counters to move output, reported Random Lengths, spurred on by short order files, heavy inventories and the prospect of reduced consumption in the last two months of the year.

As a result, sheathing prices approached collapse, as the price cuts failed to entice buyers who often preferred to cover immediate needs by purchasing from wholesalers.

The reported price of Southern plywood Westside CDX 15/32 in. 3-ply dropped $30 (8.96%) to $305/msf after holding at $335/msf in the four previous weeks – and sales were reported as low as $290/msf. Friday’s reported price was $35 (12.96%) higher than the year-ago level of $270/msf.

Southern plywood Westside CDX 15/32 in. 4-ply dropped $23 (6.80%) to $315/msf, but was $35 (12.50%) above the price reported at this time last year of $280/msf.

Southern plywood eastside CDX 15/32 in. 3-ply dropped $10 (2.82%) to $345/msf – up $70 (25.45%) from the price reported at this time a year ago of $275/msf.

The Southern plywood composite dropped $12 (2.63%) to $444/msf, but was $51 (12.98%) above the price a year ago ($393/msf).

Western plywood producers offered double-digit discounts to move order files further ahead. This strategy attracted some buyers, allowing some mills to book orders into the week of Oct. 31. The sharpest discounts of up to $20 were seen on thick sheathing, and sales of truckloads of ½ in. 4-ply were reported in a $315-325 range.

The reported price of Western Plywood Coast CDX 1/2 in. 4-ply sheathing, which dropped $15 in the week ending Oct. 14, fell a further $10 (3.08%) to a reported $315/msf on Friday. This was $50 (18.87%) higher than the price reported at this time last year of $265/msf.

The Western fir plywood composite dropped $9 (1.93%) to $457/msf – up $20 (4.58%) from the price reported a year ago of $437/msf.

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