By: The Working Forest Staff
FREEDONIAGROUP.COM — Demand for oriented strand board (OSB) wood panels is forecast to increase 1.0% annually through 2024 to 21.4 million square feet, as measured on a 3/8 inch basis, despite weak construction activity amid the Covid-19 pandemic. A new Freedonia Group analysis projects demand will return to growth beginning in 2021 and continue to expand through 2024, driven by growth in new single-family home construction and rising spending on home renovation projects:
- Roofing and subflooring will remain the leading applications for OSB panels, accounting for almost two-thirds of demand gains through 2024.
- Demand for OSB in engineered wood products is forecast to grow at an above-average pace as OSB takes share from medium-density fiberboard and particleboard on the strength of its significantly lower cost.
- Although from a small base, finish flooring will be the fastest-growing application for OSB, boosted by the growing popularity of engineered wood flooring due to its better aesthetics than many LVT and laminate products and lower cost and better performance than natural wood.
OSB Industry to Remain Heavily Concentrated
In 2019, the top six suppliers of OSB to the US accounted for over 75% of demand and an even greater amount of US production of these products. The leading manufacturers have extensive resources devoted to product development, manufacturing techniques, marketing, and distribution.
In November 2019, the industry consolidated even further when West Fraser Timber Company, a leading supplier of lumber and wood building products, announced its acquisition of Norbord, the leading global producer of OSB and a key supplier of engineered wood products, such as plywood. The transaction, which is expected to be completed in the first quarter of 2021, will create an integrated global wood building products manufacturer with annual sales of about US$6 billion.