Increased OSB Capacity to Drive up Wood Fiber Prices in U.S. South
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The return of the U.S. housing market is driving up demand for lumber and wood panel products. In response, oriented strand board (OSB) capacity is expected to expand, according to a new study published this week by RISI, Boston, Mass., USA, putting increased pressures on wood fiber pricing in the U.S. South.
Additional capacity will come from idle mills being reopened, expansions at currently operating locations, and potentially from newly opened mills. Some 4.5 billion sq. ft. in increases to OSB capacity have already been announced as coming online through 2014.
"Since the collapse in the U.S. housing market, a significant amount of OSB capacity has been idled. The recent recovery in the U.S. housing market is now driving up demand for OSB both cyclically and seasonally. This increased demand is juxtaposed by a curtailed capacity base. As capacity is added to meet cyclically improving demand, additional wood fiber will be needed. The U.S. pellet export market is developing at the same time that OSB production is ratcheting up and will have implications for wood fiber demand and ultimately prices," said David Fortin, senior economist, Wood Products at RISI.
OSB Capacity Expansion and the Development of US Pellet Exports - Impacts on Woodfiber Supply examines the impact of a sustained housing recovery on the demand for OSB in North America. The study clearly shows how much additional OSB will be needed to meet the expanding demand. It also indicates where this OSB will come from imports, mill restarts, mill enhancements, and potential greenfield mills. The study then looks at whether wood fiber availability will become an issue as mills compete for resources with the developing U.S. pellet market.
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