Structural Panel Output Slips

North American structural wood panel production reached 38.97 billion sq. ft. (3/8" basis) in 2001, down 3.4o/o from the record 40.33 billion ft. produced in 2000, according to APA-The Engineered Wood Association.

Oriented strand board production actually increased for the year, up 880 million sq. ft. to 2l.53 billion. Plywood production, however, declined lla/o to 17.44 billion ft. OSB as a percentage of total structural panel production increased to 557o, up from 5l7o in2000.

The drop in plywood production reflected continued weak demand in the industrial sector. Production of U.S. sanded plywood, which depends largely on industrial market demand, dropped to 2.26 billion ft., the lowest volume in a decade. U.S. rough (sheathing, siding and touched-sanded) plywood also dropped off 13.87o, to 12.86 billion ft.

Eight plywood mills in five states closed permanently in 2001, another closed indefinitely, and yet another has announced it will close indefinitely by March. Since January of 2000, l6 plywood and one structural composite facilities with a combined production capacity ofjust over 2 billion sq. ft. have closed. North American OSB production capacity over the past two years, conversely, has increased by 2.3 billion ft.

Total panel production in the U.S. declined 1.73 billion ft. to 21.65 billion, while production in Canada rose a modest 373 million ft. to 1 1.32 billion.

Declining panel exports and rising imports continued a trend that has been under way since the late 1990s. Excluding shipments between the two countries, U.S. and Canadian exports fell off 217o, to 859 million sq. ft. in 2001, based on projections using data through October. Declining demand for U.S. plywood in European Union countries has been especially steep, dropping from more than 1 billion ft. in 1991 to just 29 million ft. last year. The continuing high exchange value of the dollar, rising European panel production capacity, and low cost imports from other countries have all contributed to the decline.

Again excluding U.S.-Canadian trans-border shipments, U.S. softwood plywood imports rose more than 100 million ft. to 231 million. while OSB imports doubled to 67 million. Most of the imported plywood came from Brazil (107 million ft.) and Chile (67 million ft.). Canadian plywood imports rose from just 4 million to 51 million sq. ft.

Among other engineered wood products, U.S. and Canadian glulam production declined 4.57o to 359.8 million bd. ft.

Wood l-joist and laminated veneer lumber output, however, rose substantially. I-joist production climbed 77o to a record 925.6 million linear ft., while LVL production increased 8.1 percent to 61.1 million cubic ft., also a record. The increase in production of both products at rates greater than the increase in housing starts indicates the products continue to gain market share.