OSB prices appear to have reached a plateau after a long run of uninterrupted gains, but the consensus is that upward progress will be resumed relatively early in the new year once the building season restarts.
Confirming that his business is already taking orders for January, one producer said that the price trend in 2011 would remain largely positive – not least because of the unrelenting fibre supply challenges facing mills across Europe. “Next year, there will be OSB price increases because of fibre above all else,” he said.
The year now ending “has seen value come back into the product”, with clear evidence that OSB has snatched market share from certain forms of plywood. There is also the prospect of an ever brighter future as consumption in Europe is expected to grow between 8-10% per year over the next few years.
In reviewing the third quarter of 2010, Norbord’s president and CEO, Barrie Shineton, confirmed that the improvement in construction activity during the first half of 2010 was carried over into the July-September period, thus helping to push OSB prices some 37% higher in Europe than in the same quarter last year.
While underlying demand dynamics, limited imports and a weak pound “suggest a reasonably positive outlook for our European-based business in 2011”, raw material input prices – particularly for wood and resin – remain “a concern” for Norbord in both North America and Europe.
“These costs have stabilised this quarter but at levels that are 10% higher than in the same period last year,” said Mr Shineton.
