OSB production patterns in Canada
November 7, 2013
OSB (Oriented Strand Board) production in Canada has grown rapidly, driven by a cost advantage over plywood and acceptance in residential construction and remodeling markets for any structural panel use. The U.S. housing boom pushed production to new highs, but then crippled production when the bust came, with a 61% production drop between 2006 and 2009 (Figure 1). Since then production has recovered some losses, and will likely closely track the fortunes of the U.S. residential construction sector.
Structural panel production in Canada
Sources: APA-Engineered Wood Association, Forest Economic Advisors
OSB’s cost advantage over plywood has widened over the years, due to costs rising faster for plywood than OSB (Table 1). This is mostly due to more flexible fibre requirements for OSB versus the type of logs required to make plywood.
|(US$ per thousand square feet, 3/8 inch bases)|
|OSB - Canada||91||92||136||137|
|OSB - US||84||108||133||142|
|Plywood - Canada||143||193||249||264|
|Plywood - US||134||211||230||238|
Source: RISI, Forest Economic Advisors
Experts suggest future OSB production growth will continue to be driven by OSB’s cost advantage over plywood and the U.S. housing market recovery. OSB production will likely grow by 7% (2013) and 17% (2014) while plywood production stays flat (Figure 1).