Post by
mr1derful on Aug 14, 2013 3:13pm
Supply
Take a look at the recent OSB prices on Random Lengths and you see the 7/16th price last week at $260. A year ago the price was $320. If you listen to the conference calls with management last quarter they all used the lousy weather in spring as a major reason for the drop in prices. However, what they don't talk about is that prices are dropping because of increased supply from the re start of idled capacity. The managements are justifying restarting idled capacity based on the thesis that US housing starts are going to accelerate next year at around 1.2 million units. However, interest rates have jumped sharply and US home builders have sold off significantly. What happens if housing starts don't accelerate next year and yet we have additional OSB capacity that is still coming on board over the next year? If pricing is weak now can you imagine what pricing will be like as new supply keeps building over the next year?
Comment by
PAGODA5 on Aug 14, 2013 3:17pm
Yes...this dog is dead. Glad I am out above $3. OSB prices are in the crapper for the forseeable future.