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September 27th 2005 - PORTLAND, Ore., Sept. 26, 2005 - The calm in structural panel and lumber markets following the post-Katrina rush to purchase needs was short-lived, Crow's newsletter reported Friday. After a lackluster beginning to the week, buyers entered the market to purchase before Hurricane Rita made landfall Saturday on the Texas-Louisiana Gulf Coast.
Buyers exhibited an obvious need to purchase more panel volumes for late October delivery, but, for the most part, resisted buying volumes for November shipment. Most rated sheathing items in the southern pine plywood market showed strong price increases.
Lumber futures gains last week on the Chicago Mercantile Exchange based on the perception that lumber supplies will decline in the wake of the latest storm helped instigate a run in the SPF market. Short covering by traders added fuel to the fire, Crow's noted.
SPF 2X4's surged $22/mbf from the previous week and at $350/mbf were $66 or 23% higher than the week before Hurricane Katrina, according to Crow's. Benchmark North Central OSB prices were up $15/msf last week to $401/msf, higher by $137 or 52% prior to Katrina.
Production in the hurricane impacted region has also been reduced since Katrina struck Aug. 29 and full operations are not expected at least for a few more weeks.
"It is going to get tighter," said one producer referring to the plywood supply following Hurricane Rita. "And we have already lost production that cannot be made up."
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