18 | Focus on OSB: North America


fixed rate mortgage to average 6.3% in 2024. This likely will improve housing affordability and entice more home buyers to return to the market.”


The small decline of average US house prices during 2023 plus recent mortgage rate decreases has caused housing to become relatively more affordable. Nevertheless, houses still are expensive relative to the traditional lending rule of thumb that no more than 28% of gross family income should go for mortgage, property tax, and insurance payments.


OSB PRICES AND PROFITS FALL IN 2023 OSB market prices throughout all of 2023 remained below what prevailed from summer 2020 to summer 2022. The market price for benchmark Southeastern 7/16in (11mm) OSB regularly exceeded US$1,000 per m3


factors of labour, wood fibre, adhesives, and energy have mentioned the increased costs. Random Lengths reports that current plywood production costs may be up to 50% higher than pre-pandemic.


Three publicly traded forest products


corporations (Louisiana Pacific, West Fraser, and Weyerhaeuser) report OSB manufacturing segment results. Combined OSB segment revenue grew to US$4bn in 2023 from US$2.6bn in 2019. Unit sales return was about 57% higher in 2023 than in 2019, and unit manufacturing cost increased by 28%.


With approximately half of additional during the Pandemic, and OSB makers


generated record profits. However, 2023 prices were higher than what prevailed prior to 2020 when the price was often below US$200 per m3


. per m3


Average 2023 price ranged from US$222 during Q1 to US$460 per m3


during


Q3 summer building season. The price averaged US$320 per m3


remained around US$340 per m3 first two months of 2024.


over Q4, and has during the


The highest inflation since the Reagan era of the early 1980s also reached OSB makers. Forest products manufacturers with the key


revenue flowing through to the bottom line, margins did greatly expand. OSB segment profitability (as measured by EBITDA) for these public companies grew to an aggregate US$950m in 2023 compared to US$150m for 2019.


NA PLANPROJECTS One major project was completed during 2023. After purchasing Georgia Pacific’s idled mill in Allendale, South Carolina in 2021, West Fraser completed its refurbishment and began operations in June. In West Fraser’s experience, it can take up to two years to reach full capacity after a new mill begins production.


In April, 2023, Kronospan announced its first North American OSB factory in Oxford, Alabama. Kronospan already makes MDF,


particleboard, and laminate flooring at Oxford. Startup is anticipated for 2026 or 2027. Two other openings that had been anticipated for late 2023 were delayed until the first half of 2024. As of February 2024, Tolko has almost finished refurbishing major machine centers at its fire-damaged mill in High Prairie, Alberta. Repairs include replacing the multi-opening press with a state-of-the-art continuous press. The second Roy O Martin OSB greenfield mill in Corrigan, Texas will also soon begin operations. The company’s original OSB facility in Corrigan was temporarily closed due to damage from an early December 2023 fire, and the abrupt supply reduction contributed to higher market prices. Huber announced a greenfield facility


in Cohasset, Minnesota during 2021, and ordered modern equipment. Huber ended up canceling development of this Minnesota mill in February 2023 because the company believed that it could not timely overcome objections from neighboring indigenous communities about the project’s environmental impact on ancestral lands. Instead, during June 2023 Huber announced that it will build the factory in Shuqualak, Mississippi using machinery originally destined for Minnesota. The formal groundbreaking took place in October 2023. Machine start-up is scheduled for 2025 and full production in 2026.


Openings: OSB Mills Company


West Fraser


Estimated capacity Location Event


Roy O Martin Corrigan (#2) TX Tolko Huber


Kronospan Godfrey


AL


Allendale SC reopen mill greenfield


High Prairie AB reopen mill Shuqualak MS Oxford Jay


ME


TOTAL (new and pending mills) Source: public announcements and news


OSB price development QUARTER


2019 2020 2021 2022 2023


LPX ($/m3


$228 $390 $733 $622 $378


) WFG ($/m3


$227 $378 $677 $565 $353


) WY ($/m3


$245 $387 $763 $625 $372


WBPI | April/May 2024 | www.wbpionline.com )


greenfield greenfield greenfield


Press


Foucs on OSB North America Restricted content


Dieffenbacher multi-opening Dieffenbacher multi-opening Dieffenbacher continuous press Siempelkamp continuous press TBA TBA


TBA TBA


To view please subscribe OSB per unit price USD / msf (3/8" basis)


av OSB unit rev ($/m3


)


$231 $384 $712 $596 $364


av OSB unit cash cost ($/m3


)


$218 $219 $271 $293 $279


av unit margin ($/m3


)


LPX,WFG,WY $13


$164 $441 $302 $84


AV. OSB segment EBITDA MARGIN


6%


43% 62% 51% 23%


VOLUME m3


N.A. OSB MARKET SHARE


56% 53% 53% 53% 55%


(mm) USD (mm)


VOL - MARKET (m3


(kk))


20,341 20,342 21,079 20,861 19,781


$ SIZE - MARKET


$4,709 $7,805 $15,012 $12,425 $7,197


Opening date


2023 2024 2024


2025-2026 2026-2027 2026-2027


millions


(3/8” basis) 760


600 860 675 700 800


4,395


thousands m3


673 531 761 597 619 708


3,889


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