In the UK, OSB prices have generally increased by around 3% since the start of the year – but there is a belief that "they should have gone up a lot more" given lack of profitability for producers, mounting cost pressures (notably chemicals) and still-high plywood prices. It was also noted that OSB prices are better in certain parts of the Continent than in the UK.
One of the leading OSB producers argued the case for an increase of perhaps 5-7% at the start of the second quarter while another supplier to the UK has intimated that his company is likely to seek a price increase of 3-5%, again effective from the beginning of April. The former contended that UK demand for OSB has been unexciting so far in 2013 but that supply factors are certainly pushing in the direction of higher prices. Availability in Europe "will tighten up", partly because the Continent’s producers will increasingly favour sales into North America where prices are significantly higher, he said.
Indeed, the latest results package from Norbord emphasises the gulf in pricing on either side of the Atlantic last year. In North America, the average benchmark OSB price was 46% higher in 2012 compared to 2011, assisted by US housing starts – "the largest driver of OSB demand" – jumping 28% to 780,000 units. In Europe, meanwhile, OSB prices declined 11% from their 2011 peak levels.
However, president and CEO Barrie Shineton also stressed that all of Norbord’s panel mills ran on full production schedules last year (excluding maintenance and holidays) and that the group’s European panel business delivered "a third straight year of strong results". He added; "In the UK, where three of our four mills are located, housing starts, mortgage lending and home prices are below trend but remain stable. Both our January order files and panel prices indicate we are off to a positive start this year."
