OSB makers keep output high despite slipping prices

tTt"t Pnsr l2 months have seen I OSB manufacturers maintaining high production levels, gambling on a resurgent housing market.

According to Random Lengths, so far this year, North American OSB production is up 8.4Va compared to the first six months of 2013. Yet, without the expected spike in demand, over the last l8 months, the OSB Composite

Price has fallen nearly in half-from $438 at the start of 2Ol3 to $233 in early August. (During the same period, plywood prices rose.)

Industry leader LOUISIANAPACIFIC, Nashville, Tn., operates 11 OSB plants in the U.S. and Canada (plus one in Brazil and two in Chile), generating net OSB sales in 2013 of

$1.1 billion (representing over half the company's overall sales). LP appeared poised to grow even larger, with its planned acquistion of Ainsworth Engineered's four plants. The deal would have given LP a 63Vo share of the OSB market in the Pacific Northwest and a 55Vo share in the Upper Midwest. But in May, after eight months of wrangling with governmental antitrust concerns, LP abandoned its takeover bid.

"We believe this transaction would have led to positive outcomes for customers, employees and shareholders, and fundamentally disagree with the analysis by antitrust agencies of the competitive dynamics of our agency," said LP c.e.o. Curt Stevens.

In other OSB news, LP's Peace Valley mill in Fort St. John, B.C., hopes to gain approval by the end of this year to use a new type of wood resin-MDI (methylene diphenyl diisocynate) rather than formaldeyde.

NORBORD, Toronto, Ont., owns nine OSB facilities in North America, plus one each in Belgium and Scotland. In 2013, its OSB mills produced at approximately 75Vo of installed capacity, compared to 70Vo tn 2012. North Amerian OSB shipments rose 7 Vo , with 20 l4 expected to be even busier. Norbord restarted its OSB mill in Jefferson. Tx.. in mid-2013 and ramped up to full capacity by the fourth quarter.

It is also rebuilding the its curtailed Huguley, Al., mill to prepare it for a possible restart in mid2015, if demand increases. The company is not planning to restart its mill in Val-d'Or, P.Q., this year, but will continue to monitor market conditions.

"In North America, homebuilding activity continues to improve," said president and c.e.o. Peter Wijnbergen. "But the pace has been held back by labor availability and a lack of entrylevel buyers, and OSB prices have been disappointing."

WEYERHAEUSER, Federal

Way, Wa., saw its six North American OSB plants increase production by 8.44Vo last year, from 2.511 billion sq. ft. in 2012 to 2.723 billion in 2013, reaching 90Vo of capacity. Sales rose 10.5Vo, from $2.508 billion in 2012 to $2.772 billion in2013.

Sales kicked off a notch behind in 2014. "Severe winter weather dampened the start of the spring building season," said Doyle Simons, who became president and c.e.o. last year.

The year has marked one milestone-Weyerhaeuser's OSB mill in Edson, Alb., is celebrating 30 years of operation, reportedly making it the first OSB plant in Canada to do so.

AINSWORTH ENGINEERED,

Vancouver, B.C., is regrouping, following the collapse of the proposed acquisition by LP.

In 2013 , Ainsworth's four Canadian OSB plants generated sales of $488 million- 19.2Vo higher than 2012, thanks to significantly higher OSB prices. Production was, however, slightly down (0.7Vo) compared to the year prior, due to maintenance downtime and transportation issues.

Late last year, the company restarted its OSB mill in High Level, Alb., which had been indefinitely curtailed six years ago.

The company also recently reintroduced two popular OSB products under its new OSC XL brand: OSB XL 9 ft. and 10 ft. panels in multiple thicknesses and custom lengths.

HUBER ENGINEERED WOOD, Charlotte. N.C.. owns five OSB mills.

GEORGIA-PACIFIC. Atlanta. Ga., has been operating six of its nine OSB plants. Its mill in Skippers, Va., was mothballed three years ago, while plants in Grenada, Ms., and Mt. Hope, W.V., were shut down three years ago.

TOLKO, Vernon, B.C., is back up to three operational OSB plants, with the restart of its Athabasca mill in Slave Lake, Alb. The huge facility, which opened in late 2008 before closing months later due to poor market conditions, restarted in December 2013 and is expected to reach full production capacity by the first quarter of next year.

Late last year, Tolko also acquired full ownership of the Meadow Lake OSB mill in Meadow Lake, Sask., per the terms of its original limited partnership contract signed in 2001 with the government of Saskatchewan and several aboriginal stakeholders.

ROYOMARTIN, Alexandria, La., is moving into its seventh year of operation at its OSB facility in Oakdale, La.

The company has been FSC-certified by the Rainforest Alliance since 2002, and has completed 2014 FSC chain-of-custody and forest management annual audits with the alliance.

ARBEC

FOREST PRODUCTS,

St.-Leonard, P.Q., operates an OSB mill in St. Georges de Champlain, P.Q., which was idled from Aug. 2-21.