North American OSB Market To Improve In 2017

Vancouver, Canada: In WOOD MARKETS’ new five-year OSB & Plywood Chapter forecast, finding the right balance between oriented stranded board (OSB) mill start-ups relative to the expected strong US housing demand will be a key wild card over the next few years in North America. 

After seeing an oversupply of OSB production in early 2014 from the start-up of seven curtailed OSB mills over an 18-month period, a more balanced OSB market finally emerged in mid-2015—this situation should continue until sometime later in 2017. 

The forecast also shows that OSB demand should increase by over six billion square feet between 2016 and 2021—that balances relatively well with the expected new capacity additions and normal annual incremental production gains. 

However, the exact timing of new capacity installations and their start-up date relative to rising demand will have the greatest impact on OSB prices—this ‘Goldilocks effect’ of trying to get the temperature right, or the balance of OSB supply versus demand, will create some price volatility at various times in the next five years. 

As demand remains strong and production tightens before new mills start up, OSB prices were expected to improve in 2017.

 

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