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Week of September 1, 2003

Front Page

President's Message

* Building for Tomorrow Starts With Accommodative Housing Policies

Housing Forum

* Builders Care About Saving Trees

Housing and Economics

* New Home Sales Headed for a Banner Year
* July Existing-Home Sales Smash Record
* Eye on the Economy

Systems Building

* Systems-Built Housing Is on the Rise

Multifamily

* Post Office Easing Mailbox Retrofit Requirement
* Good Management Can Stamp Out Apartment Meth Labs

Business Management

* Don’t Mix Personal Funds and Company Finances (If You Can Help It)

Sales and Marketing

* Productive Direct Mailing: It’s All in the Detailing

Small Builders and Remodelers

* There Are Three Good Reasons to Earn an NAHB Designation

Housing Finance

* Navy Announces Privatization Project for Pacific Northwest

Seniors Housing

* Forget What You Used to Know About the Retirement Market

Labor

* Builders to Train Dallas Youths in Construction Trades

Building Products

* New Line of Insulation Is Formaldehyde-Free

Women's Council

* Women Building a Legacy One House at a Time

Member Dividends

* New York Focuses on Associate Member Retention and Recruitment With NAHB Help

International Housing

* Mexico Is Focus of International Housing Conference

Building News Coast To Coast

Association News & Events

* Survey Aimed at Improving Arbitration Services
* Boost Your Marketing Through These Awards Programs
* Calendar of Events

NBN Back Issues

 

Hefty Price Increases Posted for OSB and Plywood, But May Be Short-Lived

Home builders in different parts of the country have been reporting hefty increases in the cost of Oriented Strand Board (OSB) and plywood. Economic analysts at NAHB are hopeful that prices will begin to ease within a few months, but builders may be facing some unpleasant surprises in the short term.

In its Aug. 22 report of structural composite panel prices, Random Lengths noted that, “OSB’s historic price run reached stratospheric levels as producers aggressively raised quotes, often several times per day. One trader’s observation, ‘It’s a frenzy again,’ was affirmed throughout the distribution chain and across the U.S. and Canada.”

The Producer Price Index showed a 43.6% increase in OSB prices from the start of this year through June. Price increases have intensified over the summer.

Partly to blame for the price escalation of OSB have been out-of-control forest fires in British Columbia that have halted some harvesting activity in the province.

There also have been reports that the U.S. Defense Supply Center in Philadelphia recently purchased about 20 million square feet of  plywood for shipment to Iraq. That is still a fairly small amount; annual consumption of plywood in the U.S. totals about 16 billion square feet.


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Strong demand for single-family housing in the U.S. has continued to bring down inventory levels and attempts to meet demand and rebuild inventories have produced some panic buying.

“I think the price hikes will end and be partially reversed in the next few months, provided that we don’t have a big hurricane,” said NAHB economist Michael Carliner.

“Once the fires are out,” added Carliner, “their short-term effect may actually be to increase supply as damaged trees are harvested, but that’s not happening yet, and may not happen.”

On the larger issue of reversing troubling countervailing and anti-dumping duties on Canadian lumber imports, NAHB First Vice President Bobby Rayburn reports that the association is continuing to make headway against the U.S. Commerce Department’s finding that Canadian lumber producers are subsidized.

While plywood and OSB are not subject to punitive duties, the continuing lumber trade dispute has contributed to price increases for framing lumber.

In the most recent development in this ongoing issue, an Aug. 13 ruling by a bi-national North American Free Trade Agreement (NAFTA) panel rejected 19% U.S. countervailing duties.

Current duties of more than 27% on Canadian lumber shipments to the U.S. include 8% anti-dumping duties.

For further information, or to report concerns over rising wood product prices, e-mail Michael Carliner or call him at 800-368-5242 x8376.


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