OSB prices continued on an unbroken climb over the summer months and are expected to advance still further during the fourth quarter. According to one industry expert, increases of around 10% have been recorded in the last three months on the back of the rising costs of wood, resin and glue as well as a balance between supply and demand which has proved conducive to further price gains.
A key factor in OSB’s consistent upward progress has been price and availability issues surrounding competitor plywoods. Faced with price differentials of typically 20%, many end users have opted to switch to OSB for applications in which plywood had traditionally reined, thereby fuelling more demand and higher prices for the former. Several contacts argued this week that the price-led nature of the UK plywood market has led to a dip in overall quality which has “played into the hands of alternatives like OSB”.
According to a leading OSB producer, whose company took no downtime in the summer and has sold most of its volume until the start of next year, 2010 is on course to be “the UK’s biggest buying year for OSB”, thereby helping some operators to make a welcome return on their investment. He anticipated further demand growth in 2011 but he believed capacity expansions would be concentrated more on eastern Europe because of “the lack of trees” across western Europe.
In announcing its results for the second quarter of 2010, Norbord stated that indicative OSB prices in Europe improved 14% quarter over quarter due to high plywood prices, lower shipments from the US and stronger demand.
