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The price of a plywood substitute that used to be cheap is hitting repeated record highs, adding to the already skyrocketing cost of building a home in North America.
Oriented strand board, or OSB, traded at $1,527 per thousand board feet in June, marking a 97% increase since the start of 2021, according to Bloomberg data.
The rally in OSB is due in part to a storm in Texas earlier this year that caused a shortage in resin, a chemical substance needed to make the product.
OSB is a versatile wood panel that shares many of the characteristics of plywood but at a more affordable price. It is a combination of wood and adhesives and is structurally stable and lightweight.
The wood industry has been one of the biggest beneficiaries of the pandemic, as more people built and renovated their homes. When new home construction and home-improvement sales boomed earlier this year, inventory for lumber and OSB, among other commodities, were running low.
Experts said the surge was unexpected. The industry, for that reason, struggled to catch up.
"You don't just start up a mill at the snap of a finger," Drew Horter, president and CIO of Tactical Fund Advisors told Insider. "This is a supply chain problem."
OSB's continued rally to new heights comes at a time when lumber prices are cooling after an epic 400% rally over 12 months.
"It's even more difficult to get OSB at the moment than it is lumber," David Flitman, CEO at Builders FirstSource, told Bloomberg TV on Wednesday.
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