Norbord’s UK and German markets still “strong”

Group-wide, including the main North American operations, Norbord said its Q2 EBITDA were its best since 2004.

“In Europe, our financial performance is nearly back in line with its long-term quarterly trend despite the currency translation headwind from the weaker Pound Sterling and the negative impact of higher resin prices,” said Peter Wijnbergen, Norbord’s president and CEO.

“Demand from our key UK and German markets remains strong and we expect the improvement in our European business to continue. Our project to modernise and expand the Inverness, Scotland OSB mill to serve this rapidly growing customer demand is well advanced and remains on track to begin production later this year.”

Norbord’s European business saw double-digit year-over-year OSB demand growth in both the UK and Germany. European panel prices in US dollar terms were impacted by the significant devaluation of the Pound Sterling following the Brexit referendum in June 2016.

In local currency terms, OSB prices in the UK were up 11% from the same quarter last year and 4% versus the prior quarter. On the continent, OSB prices were 3% lower than the same quarter last year but improved 2% versus the prior quarter.

UK MDF and particleboard prices were up 10% and 6% year-over-year and 1% and 4% quarter-over-quarter, respectively. In Europe, Norbord’s shipments were 3% higher than the same quarter last year and 1% lower than the prior quarter.

The European mills produced at 105% of stated capacity in the quarter compared to 104% in the same quarter last year and 98% in the prior quarter. Capacity utilisation increased primarily due to improved productivity, with fewer maintenance shutdowns also having some impact quarter-over-quarter.

The company’s US$135m (€115m) modernisation and expansion of its Inverness OSB mill remains on budget and on track to start up in the second half of 2017, with no disruption to existing production volumes in the interim.