Why is OSB so expensive?

Since it lasts longer, manufacturers will sell fewer boards over time. To ensure they don't miss out on future profit, they need to price their boards at a higher price point. OSB is expensive because it's durable and requires more resources and processes to make it.

thecoldwire.com - Why Is OSB So Expensive? (Top 10 Reasons) - The Cold Wire

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Lumber prices have reached extreme highs in the past few years, but none have climbed so high as OSB. OSB, or Oriented Strand Board, is a type of lumber used for structural support in construction. It’s similar to particleboard or plywood but tends to be thicker and more durable.

When lumber prices rose, OSB prices rose, too.

Lumber prices eventually fell as supply started to reach high demand.

That didn’t happen with OSB, however.

OSB prices continue to increase as much as over 500% compared to a few years ago.

Here are 10 reasons OSB is so expensive.

Why Is OSB So Expensive? (Top 10 Reasons)

1. Structural Framework And Support

One of the reasons OSB is so expensive is that it’s used in building construction. In fact, OSB makes up elements of the structural support for a home as well as its framework.

It’s used to shape the floors, walls, and even roofing elements.

Since it’s used a lot, contractors and builders need a lot of it. A large home, for example, is going to need a substantial amount of OSB compared to a smaller home.

Since the demand is higher, the price is going to be higher.

Other types of lumber tend to be cheaper because builders use less of those types to make the home. Because homes use a lot of OSB, the demand for it is high.

When supply is low, the price for OSB increases.

OSB is expensive because home construction requires a lot of it.

2. Durability

While OSB is similar to particleboard or plywood, many builders prefer to use OSB because it has greater durability.

When building a home, durability matters.

Builders want the home to last for years or else their reputation can start to take a hit.

Homeowners also want durable homes to avoid repairs and save money.

Because of that, they’ll often invest in more expensive materials that offer greater durability like OSB.

Making a product durable comes with an expense.

For one, OSB uses various wood chips and an adhesive in its creation. The wood chips need to come from durable trees rather than softer trees.

Softwood like cedar or pine is standard for plywood.

Hardier trees tend to lend their wood chips to make OSB.

A high-quality adhesive then bonds the wood chips together and seals them.

The result is an extremely strong board that can take a lot of weight.

This is important for certain construction projects like roofing.

In areas that see a lot of snowfall, the structural elements need to be able to hold up the weight of the snow.

Durability matters.

It’s also important for areas that see a lot of wind damage.

Since it takes more resources and engineering to make the board durable, it adds to its cost.

Durable wood also lasts longer.

Since it lasts longer, manufacturers will sell fewer boards over time.

To ensure they don’t miss out on future profit, they need to price their boards at a higher price point. OSB is expensive because it’s durable and requires more resources and processes to make it.

3. Engineering Process

OSB is a plank of engineered wood.

This means that it’s made in a factory.

It isn’t created naturally even though it uses natural elements.

There are several steps that go into its creation.

First, the wood chips need harvesting.

Since OSB is a higher standard of engineered wood, not all wood chips are acceptable. It can take time to sort out the correct chips from those who are too weak or too damaged.

Then they need to set in a certain pattern.

OSB, like plywood, uses a specific orientation with its chips.

The orientation makes the board stronger.

They interlock like gears or a zipper which makes it difficult to destroy. Because OSB comes in various levels of thickness, some boards require more work than others.

That also means they require more wood chips than others.

The more wood chips that it needs, the more expensive the board is going to be. Once the chips are in the correct orientation, an adhesive is poured over them to keep them in position.

The adhesive also lends durability and strength to the board.

This process is repeated until there are enough layers to create the desired thickness. Finally, the manufacturers cut the board in the appropriate dimensions for the suppliers. Since the engineering process for OSB takes a lot of resources and some time, it can be expensive. It isn’t handmade, but it does require factory workers to oversee the process. Because a lot of labor goes into the engineering process, it makes the product cost more to make.

OSB is expensive because its engineering process is lengthy and involved.

4. Thickness

The price of OSB fluctuates based on the thickness of the board.

There are three standards of OSB thickness.

They include:

3/8”

7/16”

15/32”

The two most common of these are 3/8” and 7/16”.

The thinner OSB planks are popular for interior walls while the thicker planks are for exterior walls, flooring, and even roofing. In cases where the building sees a lot of snowfall or storms, some builders will choose to use 15/32” thickness for increased durability. The thickness affects the price of OSB because it means it uses more materials.

The thicker board requires more wood chips and adhesive in its creation.

Since it needs more materials, the cost to make the board rises.

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If you need a lot of OSB planks of increased thickness, then the price of your project may skyrocket. OSB is expensive if you use its thickest boards because they cost more to make.

5. Labor Shortages

There’s no question that labor shortages in various industries are also contributing to the price of OSB. Whether it’s the COVID-19 pandemic or a desire to find better work, there are several reasons behind labor shortages.

To make OSB, several hands are involved.

There are those in the lumber industry who cut wood and send it to the factory for processing.

The pandemic shut down many lumber companies.

Some had to release their employees because they couldn’t afford to keep them.

Those who remained operational had to do so with a smaller workforce.

Because of its labor shortage, there were fewer people able to cut down trees and deliver them.

This impacted the supply of lumber and created a shortage for OSB.

Since there was a shortage, the price of OSB increased.

Some lumber companies also saw their employees leave willingly.

Those who wanted to try and find better employment elsewhere quit.

That created vacancies that some companies are finding difficult to fill.

As a result, the company is unable to produce as much lumber as it did before. The factory itself is another area where labor shortages have contributed to the price of OSB. After the lumber arrives at the factory, the workers then need to process its wood chips and start the manufacturing process. COVID-19 also shut down many of these factories because they weren’t deemed essential. Those that were able to remain open had to do so with a smaller number of employees. Since there were fewer workers in the factory, there were fewer boards processed every day.

That also impacted the supply of OSB.

Whether they sought better pay, better benefits, or they just wanted to change their trajectory, many factory workers decided to quit their jobs.

That meant there were fewer workers to engineer OSB boards.

These reductions can occur anywhere in the pipeline.

From the lumber workers to the delivery drivers, any time there’s a labor shortage, it means they are producing fewer products.

With a decrease in supply, the price for the product increases.

OSB is expensive because of the various labor shortages occurring in the country and world.

6. High Demand

Another factor leading to the increased price of OSB is its high demand. The demand for OSB always tends to be on the higher side because of its use in construction.

However, thanks to the COVID-19 pandemic, the demand for OSB skyrocketed.

With more people working at home, they were able to turn their attention to neglected home projects.

Some wanted to build new office space for themselves.

Others wanted to finally repair certain elements of their home that they’d never had the time for before. That required the use of OSB since it’s for both structural support and framework. With more DIYers attempting to renovate and repair their homes, more people were buying OSB. Even though the demand for it has died down a bit since workers are slowly returning to in-office work, suppliers are still struggling to fill the void that bulk shopping created. Builders are always in need of OSB and so it doesn’t give suppliers the time they need to fill the gap from when everyone else was buying OSB, too. Until they can produce more and exceed demand, the price for OSB will continue to be high. OSB is expensive because of the high demand there was for it during the pandemic.

7. Wildfires

Another serious problem that’s impacting the price of OSB is wildfires.

As if the pandemic weren’t enough, the past few years have also seen an increase in wildfires. Whether it’s in California, Canada, or the Amazon, trees used for lumber are burning. Part of the reason wildfires are on the rise is the severe drought conditions. With less rainfall in certain areas, the wood and debris in an area become extremely dry.

All it takes is a small spark for a fire to start.

Since the rest of the area is extremely dry, too, the fire spreads fast. The wildfire destroys thousands of trees that the lumber industry would have used otherwise.

This means that there are fewer trees that they can cut down.

Wildfires also impact their ability to do their job.

Since lumber companies have a limited area of land in which they can cut trees, they’re unable to cut anywhere else if that land becomes unavailable to them for a time.

They can’t enter the forest when it’s on fire.

Instead, they have to wait until firefighters can stop the problem or wait for the fire to go out on its own. Meanwhile, they’re unable to cut any more trees and bring in more supplies for the factories. This means that the factories don’t have the materials they need to make OSB. Any time there’s a wildfire, you can expect the price of lumber to increase. It creates a shortage since lumber companies are unable to process wood during that time. OSB is expensive because of the recent wildfires causing delays and decreasing the number of viable trees to cut.

8. Seasonal Shopping

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The time you shop for OSB can also determine how expensive it is. The spring and summer months are the most expensive times of the year in which to buy OSB.

That’s because the weather is warmer and sunnier.

Everyone is doing their construction projects during that time.

Whether it’s DIYers, government workers, or private builders, everyone is outside and using OSB. Since the warmer months see an increase in demand for OSB, the price for the boards also increases.

This is the opposite of what’s true during the winter.

Since many parts of the country see snow and freezing temperatures, construction projects are either stopped or finished before the season arrives. Only a few parts of the country are still able to build in the winter.

That alleviates the demand for OSB.

Since there’s less demand for it in the winter, the price of OSB decreases slightly. OSB is more expensive in the spring and summer because the demand for it increases.

9. Home Building Increased

One of the results of the pandemic was that it slashed mortgage rates for a time. In an effort to keep people in their homes, the government ordered banks to reduce their rates and pause evictions. An opportunity arose for those who had always wanted to buy a home but didn’t like the high mortgage rates they saw.

It resulted in a buying frenzy of pre-owned and new construction homes.

In particular, many Americans were looking to buy a home out of the city. Thanks to the shift to working at home, more families were able to move out of the city. They sought homes that had a decent yard and a good distance from their neighbors. The reduction in mortgage rates meant they were able to afford the home.

The problem is that it led to an increase in homebuilding.

There was a high demand for newly constructed homes.

Builders worked fast to meet the demand.

That also meant the demand for OSB rose to complete these new projects in time. With more families looking to buy new homes thanks to the slashed rates, the demand for OSB also rose. With suppliers unable to meet the increase in demand, the price of OSB increased.

OSB is expensive because of the recent home-building and home-buying craze.

10. Slow Mill Expansion

A final reason OSB is expensive is because of slow mill expansion.

The best way for lumber companies to meet demand is to expand their mills.

With more mills, they can hire more workers and produce more goods.

However, mills take a long time to build.

The estimated amount of time it takes to build a mill and get it operating is two years. In two years, the need for more OSB may not be as high as it is now.

Because of that, not all lumber companies want to expand.

They don’t want to take the risk of building a new mill and hiring new workers only to find that they need to shut it down because they can’t afford it anymore.

Two years is a very long time in the world of business.

It’s difficult to track what the demand for OSB will be at that time since it’s tied closely to the housing market. OSB is expensive because it takes a long time to expand lumber mills and increase their supply output.

How To Save Money On OSB

If you’re planning a building project and need OSB, then you may be looking for ways to save money. Because the price of OSB is so high, it can increase the price of your project by a significant amount. Here are a few tips you can use to save money on OSB.

1. Choose Plywood

Plywood is similar to OSB, and in some cases, it’s better.

Most homeowners used to choose OSB because it was less expensive than plywood, but that is no longer the case. If it fits your project, then you may want to consider using a cheaper alternative for your building’s structural support like plywood.

2. Wait

The primary reason OSB prices are so high right now is that suppliers haven’t been able to fill the hole that increased buying of OSB during the pandemic left.

If you can wait a few years, then do so.

It will allow suppliers to regulate the market again and bring the price of OSB down. Attempting to build a home right now can make it far more expensive than it needs to be.

Waiting can save you a lot of money.

3. Reclaimed OSB

Finally, you should consider using reclaimed OSB.

This is a type of OSB that has already been in use but went through a recycling process.

It’s as durable and reliable as new OSB planks.

The benefit is that because it’s reclaimed, it tends to go for a cheaper price.

Conclusion

OSB is expensive because of the various factors influencing supply and demand.

Since it’s used primarily in home building, its price often fluctuates based on the housing market. Despite its expense, there are a few ways that you can save money on OSB.