West Fraser’s OSB business in Europe continues to experience better demand in 2024, but MDF and particleboard are registering softer demand, the company says in its most recent Q2 update.
“While inflation appears to have stabilized, near-term risks, including relatively high interest rates, ongoing geopolitical developments and the lagged impact of prior inflationary pressures may adversely impact future demand for our panel products in the UK and Europe,” West Fraser said.
“Despite these risks, we are confident that we will be able to navigate through the current environment and capitalize on the long-term growth opportunities ahead.”
West Fraser’s global sales (including lumber) were US$1.705bn, with adjusted EBITDA of US$272m.
The European engineered wood products segment recorded adjusted EBITDA of US$6m, while the North American engineered wood products division posted EBITDA of US$308m.
In the Europe EWP segment, West Fraser continues to expect soft near-term demand for its panel products, with 2024 shipments of MDF, particleboard and OSB expected to be similar or slightly better than 2023 levels. Input costs for the Europe EWP business, including energy and resin costs, are expected to stabilize in 2024 but remain elevated.
In the NA EWP segment, the company continues to expect 2024 OSB shipments to be consistent with 2023 levels.
Start-up of the Allendale OSB mill in South Carolina continues to progress and the ramp-up period for the mill will be up to three years to meet targeted production levels.
“Based on our current outlook, assuming no deterioration from current market demand conditions during the year and no additional lengthening of lead times for projects underway or planned, we continue to anticipate that we will invest approximately US$450m to US$550m in 2024,” it said.
