Status and trends : profile of structural panels in the United States and Canada

Abstract

This paper provides an overview of the North American (United States and Canada) structural panel industry, which consists of softwood plywood and oriented strandboard (OSB). The paper describes the evolution of overall capacities, effective capacity utilization, and manufacturing costs. As part of that, it describes changes in industry operating parameters such as wood use and yield, employee productivity, adhesives usage, and energy consumption. The major end-use markets for these commodities and market share trends are described as they evolved over time. Trends in foreign trade are also covered. Softwood plywood capacity peaked in 1989 at around 24 million m3 (27 billion ft2) and has since dropped to 16 million m3 (18 billion ft2). By contrast, OSB capacity has grown almost continuously and reached 23 million m3 (26 billion ft2) in 2006, on its way to about 26 million (29 billion ft2) by 2008. Productivity as measured by output capacity per employee is about four times higher in an OSB plant than in a plywood mill. Since its inception, OSB product recovery (yield) has also improved by about 15%. These are two major reasons why OSB manufacturing costs are about 25% lower than those for plywood. Given OSB’s higher profitability, most of the investment in the sector has been directed into that branch. The cyclical nature of structural panel demand combined with the tug and pull between plywood and OSB capacities have led to considerable cyclical volatility in prices and profits. Over the past 20 years, OSB has largely taken over the sheathing portion of the market for structural panels. Overall, the construction of new buildings and their upkeep and improvement are the largest market for structural panels in the United States. In 2003, about 23.3 million m3 (26.3 billion ft2) of structural panels were used for sheathing and exterior siding in these markets. The use of plywood for sheathing in walls is now rare, somewhat higher in roofs, and highest in flooring. To adapt to the competition, plywood manufacturing has evolved toward more industrial uses and higher grades of panels where its appearance and properties give it an edge that offsets its higher costs. Based on analysis of existing market shares of other materials, it is theoretically possible that structural panel consumption could be increased by about 40% over current levels. This would have represented an additional 9.5 million m3 (10.7 billion ft2) of structural panel consumption in 2003. Imports are an increasing part of supply, with Brazil, Chile, and Canada supplying growing amounts of plywood while Brazil and Europe augment major import flows of OSB from Canada.

Citation

Spelter, Henry; McKeever, David; Alderman, Matthew. 2006. Status and trends : profile of structural panels in the United States and Canada. Research Note FPL-RP-636. Madison, WI: U.S. Department of Agriculture, Forest Service, Forest Products Laboratory. 41 pages