Focus on OSB: North America | 25
O
riented strand board (OSB) has become a key structural element of North
American construction in recent decades. While the industry enjoyed unprecedented prosperity during the pandemic-induced homebuilding boom of 2020-2022, the environment has since deteriorated. At the start of 2026, the sector faced cooling demand, lower market prices, stubbornly higher costs, and arbitrary USA limitations on Canadian imports. Prices for OSB sheathing had returned to pre-pandemic levels at the end of 2025 by declining nearly 60% from the start of the year while manufacturing inputs - such as wages, adhesives, and energy - remain at least 25-30% higher than historic norms. The industry - as publicly disclosed by the largest players Louisiana-Pacific, West Fraser, and Weyerhaeuser - suffered financial losses in the second half of 2025.
The ongoing turbulence has disrupted the
market. Geographically remote OSB mills in Alberta and Quebec closed as Canadian exports to the USA fell. Additionally, while Huber’s OSB mill in Mississippi and Weyerhaeuser’s LSL mill in Arkansas continue towards start-up, little visible progress has been made at turning four other announcements into operating mills. As reduced production better balances supply with tepid demand, OSB unit prices increased in the first two months of 2026 and began to exceed unit production costs. The present recovery alleviates immediate pressures on manufacturers but pending new production capacity and unresolved macroeconomic uncertainty leave the industry in a vulnerable position. The current fragile equilibrium faces disruption from relatively high mortgage interest rates and shifting political strategies such as Prime Minister Carney’s ‘Build Canada Homes’ initiative and President Trump’s strategy to make homeownership more affordable with lower interest rates.
OSB PRICES TUMBLED DUE TO SOFT HOUSING STARTS Since OSB became a substitute for softwood plywood 40+ years ago, the fortunes of OSB makers are highly correlated with residential construction activity. Subflooring, sub-roofing, wall siding, and I-joist webbing consume almost all OSB in North America (instead of as an industrial raw material). After peaking at 1.87 million units in the
Pandemic boom of 2021 following a slow recovery from the 2008 Recession, total North American (Canada + USA) housing starts have trended down. Total starts equaled 1.61 million units in each of 2024 and 2025, with modestly higher Canadian starts offset by slightly lower USA starts. Total USA housing starts fell to 1.36 million in 2025 from 1.37 million in 2024.
However, the proportion of single-family houses relative to multi-family housing changed. USA single-family starts decreased 7% in 2025 relative to 2024, while multi- family starts increased 17%. The change is significant because a single-family unit uses approximately three times as much building materials as a multi-family unit. The smaller Canadian and larger USA
economies have become increasingly intertwined in recent decades. Housing construction activity responds to parallel economic forces, except Canadian activity is less volatile due to tighter mortgage regulations. Canadian housing starts of 259,000 in 2025 compared to 245,000 in 2024, and remain near the 40-year high of 271,000 in 2021. After five years of favourable markets,
OSB panel prices declined to near pre- Pandemic levels during 2025. Most of the decrease occurred in the first half before stabilizing at a lower level in the second half. The reference price for 7/16” OSB sheathing (Southeastern USA) of $158 per cubic metre at the end of 2025 was almost 60% lower compared to $383 per cubic metre at the start.
POOR COMPANY PROFITABILITY FOLLOWS LOW PRICES While OSB prices - that had been extraordinarily high for much of the past five years - fell to pre-Pandemic levels by the end of 2025, operating expenses remain at the inflated post-Pandemic cost. The costs of key manufacturing inputs such wages, adhesives, energy, and transportation increased 25-30% during the inflationary period from 2021 to 2023. The higher costs have not come down. Nine companies make OSB from 45
active facilities in Canada and the USA. Of the 9 makers, three publicly-traded forest products manufacturers (Louisiana Pacific, West Fraser, and Weyerhaeuser) produce 55- 60% of OSB in North America. Collective OSB sales at the three public companies declined to US$3.2bn in 2025 from US$4.4bn in 2024 and annual EBITDA margin declined to 7% from 27%. OSB segment accounting results tracked
market prices. Quarterly sales and profit margin were worse every quarter during 2025 than the previous quarter and the same quarter of 2024. Given that unit production costs were flat and unit revenue declined every quarter, EBITDA margin fell from +24% in Quarter 1 to -12% in Quarter 4.
CANADIAN OSB EXPORTS TO USA DECLINED DURING 2025 Per the April/May 2025 edition of Wood Based Panels International, non- North American OSB production capacity in 2024 equaled 17.9 million m capacity of 22.3 million m3
. With current , Canadian and
www.wbpionline.com | Summer 2026 | WBPI
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