Leading players in the domestic OSB sector were pointing the finger this week at competitively-priced imports as the main explanation for a recent softening in prices.
“The market has been relatively flat – and no lower – in volume terms,” one reported. “But prices are down a bit as a result of low-priced imports from Europe and the response to that.”
Given that cost pressures are intensifying (with glue and transport attracting specific mentions in this regard), at least one leading supplier into the UK had been hoping to implement a price increase at the start of the second quarter. “It didn’t happen, but hopefully we will see one in June,” said a spokesperson. “We can’t continue at these numbers – prices need to go up. The price gap to plywood should be getting filled.” In certain circumstances, downtime will continue to be taken in preference to “producing at a loss”, TTJ was told.
According to the latest financial results package from Norbord, Europe’s panel markets continued to show strength in the first quarter of this year despite negative economic news. Specifically with regard to the UK, it added: “The housing market continues to slowly recover with home prices, housing starts activity and mortgage lending all trending up. In the quarter, average European panel prices softened slightly compared to the previous quarter but remain higher than last year.” After peaking in the middle of last year, OSB prices were 7% lower in first-quarter 2012 than they had been in the first three months of 2011 and were 5% down on the final three months of last year, according to Norbord.
The group added: “The weak pound relative to the euro has been advantageous to Norbord’s primarily UK-based operations as it has improved sales opportunities within the UK and slowed the flow of Continental European imports. This currency trend has also supported Norbord’s export programme into the Continent.”
TTF figures for January reveal that total UK exports of OSB declined 5.3% to around 13,000m³ compared with the opening month of 2011; imports of OSB, meanwhile, were almost 16% lower at approximately 18,000m³. Another contact reported reasonable sales of OSB on the Continent – a reflection, he claimed, of a “structural shift” from plywood.
