OSB Market Trends

Implications: OSB producers are investing in an off cycle time frame which will put increased pressure on pricing.

US Housing market trends are not supporting OSB producers investments and the outlook looks like it will continue for another 15 - 18 months before any shift will occur.

OSB value added products are niche products and will not support relief for the industry.

Analysis: OSB producers will continue to face very intense price pressure for the next 15-18 months with little or no opportunities for relief.

OSB producers are dependent on new construction to generate demand for the products. OSB even value added OSB products have little use outside of new construction. OSB lumber even if it is commercial available in the market it will take 3 - 5 years before it has any impact on supplier demand since the industry is slow to accept new products.

Three major suppliers will battle it out for market share in the south. LP, I Level and Grant. I think LP could be the loser since I Level has a new more open and flexible approach to the market and Grant has a strong position with the independent lumber dealers. LP has a reputation of being difficult to do business with in some markets and this could hurt them in a time of excess supply.