FEATURE STORY

DESPITE CONTINUING demand, OSB prices began dropping fast during the summer after 18 months of record increases.

Uncertainty runs high in volatile OSB market

After reaching historic highs in June, the price of OSB began to drop through the summer, at one point plunging several hundred dollars in a single week.

Through the end of the summer the fast-falling prices have frozen many buyers, afraid the drop will continue. Yet with customers remaining active, purchasers can’t wait too long. “Business is still crazy, although buyers are holding off when they can to let prices settle in,” explained Langboard’s Chuck Rigoni. “Most can’t hold off much though, as their customers are so busy. We believe there is still very

2021 OSB Top 10

1 West Fraser

Headquarters: Vancouver, B.C.

OSB Mills (12): Huguley, Al.; Cordele, Ga.; Guntown, Ms.; Bemidji, Mn.; Joanna, S.C.; Jefferson and Nacogdoches, Tx.; Grand Prairie and High Level, Alb.; Barwick, Ont.; Chambord and La Sarre, P.Q. [Plus Scotland, Belgium]

In February, West Fraser—one of the world’s biggest lumber manufacturers—also became the world’s largest producer of OSB overnight, with the completion of its purchase of Norbord. West Fraser operates 12 OSB mills in North America (seven in the U.S., five in Canada), with an industry-leading combined annual capacity of more than 8 billion sq. ft. It also has an OSB mill in Scotland and one in Belgium. All have been running close to capacity.

And in May it restarted its mill in Chambord, P.Q., which had been dormant since 2008.

2 Louisiana-Pacific

Headquarters: Nashville, Tn.

OSB Mills (9): Clarke County and Hanceville, Al.; Houlton, Me.; Sagola, Mi.; Watkins, Mn.; Roxboro, N.C.; Carthge and Jasper, Tx.; Maniwaki, P.Q. [Plus Peace Valley, B.C. (idled); Brazil, Chile]

Capitalizing on the high prices for OSB, LP has been generating considerably more revenue on slightly less production. In 2020, its nine North American OSB mills produced just over 3.5 billion sq. ft., a 5% drop from the previous year, but increased net sales by 57%. Similarly first quarter 2021 sales jumped 145% on 7% lower volume.

LP is currently upgrading its Peace Valley OSB mill in Fort St. John, B.C., with plans to restart the facility later this year after a two-year layoff. By the time it ramps up by full production in mid-2022, the facility will add around 750 million sq. ft. of product. In the meantime, current overall capacity is 4.84 billion sq. ft.

The company has also been increasing its percentage of value-added materials OSB. In the first quarter, 47% of its OSB output was LP Structural Solutions (radiant barrier, air/water barrier, premium subflooring, fire-rated sheathing), up from 43%—continuing a recent trend.

real demand in place, and business should be good through 2022, although with the virus and other uncertainties anything could happen.”

In one sense, OSB prices “returning to earth” was as inevitable as gravity. According to the National Association of Home Builders, the average mill price of OSB increased 510% over 18 months, outpacing the spike in lumber prices by 180 percentage points. NAHB reported that prices for certain OSB items in certain markets rose even more. Reportedly, the delivered price of 3/8” thick OSB sheathing in Portland, Or., skyrocketed an astounding 662% from Janauary 2020 to June 2021.

OSB has grown to be the product of choice for most structural panel applications in new construction, outproducing plywood by a margin of two to one. Yet there are far fewer OSB mills than lumber mills, so the product is more susceptible to shortages when construction activity takes off .

As well, off ered one analyst, the OSB industry has a large number of mill that “are somewhat long in the tooth, so more maintenance downtime is needed to keep them running.”

Those issues are gradually changing. Several new mega-capacity, state-of-the-art facilities have been added over the last few years.

This past spring, West Fraser restarted a long-idled OSB plant in Quebec, and RoyOMartin increased production capacity at its mill in Texas.

As well, later this year Lousiana-Pacifi c will restart its Peace Valley operation in British Columbia after a top-tobottom overhaul, and RoyOMartin will begin construction on a second OSB mill in Corrigan, Tx. Next summer Huber Engineered Woods will start up a huge, high-capacity plant in Minnesota.

OSB production during the fi rst six months of 2021 totaled 11.9 billion sq. ft., a 7.1% increase over the fi rst half of 2020. With the expectation for healthy demand to continue and the promise of increased production going forward, hopefully less volatility is in store for OSB markets.

3 Weyerhaeuser

Headquarters: Seattle, Wa.

OSB Mills (6): Arcadia, La.; Grayling, Mi.; Elkin, N.C.; Sutton, W.V.; Edson, Alb.; Hudson Bay, Sask.

Weyerhaeuser’s six OSB mills have slowly been increasing production, hovering near an annual pace of 3 billion sq. ft.

4 Georgia-Pacifi c

Headquarters: Atlanta, Ga.

OSB Mills (5): Fordyce, Ar.; Hosford, Fl.; Clarendon, S.C.; Brookneal, Va.; Englehart, Ont.

G-P’s OSB operations have a combined annual capacity of 2.65 billion sq. ft.

5 Huber Engineered Woods

Headquarters: Charlotte, N.C.

OSB Mills (5): Commerce, Ga.; Easton, Me.; Broken Bow, Ok.; Spring City, Tn.; Crystal Hill, Va.

In June, Huber announced plans to build a new 800,000-sq. ft. OSB facility in Cohasset, Mn. Set on 400 acres, the $440-million plant will supply Zip System and AdvanTech structural panels to western and Midwestern markets—increasing Huber’s overall OSB capacity by 30%. Its fi ve mills are currently able to produce up to 2.556 billion sq. ft. a year.

6 Tolko Industries

Headquarters: Vernon, B.C.

OSB Mills (3): High Prairie and Slave Lake, Alb.; Meadow Lake, Sask.

Tolko, with a combined capacity of 2.26 million sq. ft. at its three OSB mills, has been focusing on upgrading its T-Strand brand OSB products, including improved packaging, transferable warranties, easier on-site use, and increased length capabilities.

7 RoyOMartin

Headquarters: Alexandria, La.

OSB Mills (2): Oakldale, La.; Corrigan, Tx.

To meet rising demand beyond its two mills’ 1.7 billion sq. ft. capacity, RoyOMartin in April unveiled a new production line for Eclipse OSB Radiant Barrier at its Corrigan, Tx., facility, and last month announced it would be building an additional OSB plant in Corrigan.

8 Arbec Forest Products

Headquarters: St. Leonard, P.Q.

OSB Mills (2) Miramichi, N.B.; Shawinigan, P.Q.

Arbec’s two OSB mills have a combined capacity of 620 million sq. ft.

9 Forex Amos

Headquarters: Montreal, P.Q.

OSB Mill (1): Amos, P.Q.

The company is now in its third year of producing 7/16” OSB, with a max capacity of 450 million sq. ft. yearly.

10 Langboard

Headquarters: Quitman, Ga.

OSB Mill (1): Quitman, Ga.

Langboard OSB has an annual capacity of 440 million sq. ft.