Market Report: Oriented Strand Board vs. Plywood

Oriented Strand Board (OSB) prices have been consistently above plywood prices the last couple of weeks. This seems like an oddity to those of us who remember when OSB was a substitute for plywood used in residential homes. Now, plywood will be considered an OSB substitute for a generation of builders and contractors who default to OSB for sheathing.

Plywood and OSB are typically interchangeable for most uses, although plywood has maintained a quality and industrial premium in most markets. There are indications that cross-over is beginning as we sell plywood in regions that have typically been OSB strongholds. If the process continues, plywood should maintain a parity with OSB prices going forward.

Most OSB is made in Canada or the US Southeast. No OSB is made in the Pacific Northwest, as the quality and cost of Douglas Fir fiber is typically too high to grind up for an OSB panel. If OSB is used in your Pacific Northwest home, you can be certain it is produced in Canada.

Oregon-grown Douglas Fir, particularly from the Cascade Mountain Range, is one of the best materials to manufacture engineered wood products. The temperate climate and high elevations allow slow and consistent growth for the trees leading to denser fiber and better performance. We are truly in one of the greatest wood-baskets for high-quality engineered wood products like Douglas Fir plywood, LVL, and Mass Ply.

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We were looking forward to the final court decision regarding the US Structural Plywood Coalition case against PFS-TECO, alleging that Brazilian-made plywood cannot consistently conform to the PS1 Voluntary Product Standard and is being improperly certified as compliant. Unfortunately, our counsel just informed us that while Judge Altman denied the Defendant’s claims to dismiss, the case will be delayed to June 6, 2022.

We were told that the reason for the additional delay is persistent case backlogs due to COVID-19. COVID has wreaked havoc on this case’s schedule from day one, which has been unfortunate. We remain convinced that the case is strong, and we look forward to a favorable decision in June.

According to Random Lengths, prices are still increasing for almost every wood product. Plywood and veneer price increases have been very gradual. Volumes sold have been consistent but measured.

We have not seen a blowout plywood sales volume week for the last two or three weeks. The cold weather over the last couple of weeks has also kept us on reduced natural gas usage at the plywood plant, limiting dry veneer availability. We are also hampered by reduced production levels due to labor availability and absenteeism. Plywood production and sales volumes are balanced for us right now.

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If you are around our Main Office location in Lyons, you have likely seen a large amount of earth moving operations there. We are preparing for the installation of our new Kone log portal crane.

The log yard crane is in the heart of our operations and will lead to necessary disruptions across every production center during the installation. We have already limited incoming logs and cleared space for the crane installation. This is the type of project that will last a generation. The current crane was installed 30 years ago.

We do not anticipate dramatic swings in our scheduled production hours as we approach the summer months. Our current straight-time hours have kept us well balanced under current market conditions.


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