It appears that nobody in the industry expected the market to fall off the peak as precipitously as it did in 2006 and now the mood of the OSB producers is decidedly glum as they face what one spokesman called an "extended period of excruciating pain".
Some commentators are less pessimistic, but it seems generally agreed the good times are over, for some time at least. In Europe, the reverse seems to be true. Our survey of 2005 reported doom and gloom, with prices too low and demand falling. This year we can report prices up, consumption up, order books full and a generally buoyant attitude, in spite of new capacity coming on stream in the Czech Republic and, soon, in Latvia. Of course costs have risen dramatically too, so we are not talking about tremendous increases in profits by any means. But things definitely seem to be headed in the right direction. To paraphrase the song: "What a difference a year makes" - in both the North American and European OSB industries. The other major feature in this issue is the Focus on South East Asia, with reports from Thailand and Indonesia. There is a lot happening in that region, particularly Thailand, and we report on two mills which are still under construction: Green River and Metro and two new lines running - SPB and Vanachai. There is also news of further new particleboard capacity to come in both Thailand and Indonesia; and MDF in Thailand. This is in spite of the fact that the Thai market is currently rather over-supplied with panels, so these developments seem to indicate an underlying confidence in the future. It has been a long time since a new mill was built in Indonesia and it would seem that, given the per capita consumption of panels there, SPF's planned particleboard line should not have so much trouble finding a market. Meanwhile, long-established plywood and MDF maker, Sumalindo, claims to have put a lot of effort into its wood sourcing in Kalimantan, with FSC certification for a growing part of its production (no pun intended!). The problem is, are the European consumers prepared to pay more for 'responsibly sourced' panels?