- The Washington Times - Friday, September 19, 2003

The damage left in Hurricane Isabel’s wake probably will intensify demand for plywood, an increasingly precious — and expensive — commodity for builders and homeowners.

The strong housing market and logging restrictions in the South and West have helped create more demand for plywood, but mills already are operating at near capacity, industry officials said.

“Supply is very tight right now,” said Jack Merry, spokesman for APA — the Engineered Wood Association, an industry trade group.

The nation’s wood mills produce an average 3.4 billion square feet of plywood a month, Mr. Merry said. Plywood production is running at 97 percent of capacity, he said.

Plywood prices climbed more than 27 percent nationwide between July and August and are up more than 61 percent from a year ago, according to Random Lengths, an Eugene, Ore., newsletter that tracks the wood-products industry.

The price for panels of oriented strand board, a common alternative to plywood that is made of wood chips and glue, was up 12 percent between July and August and more than 117 percent from a year ago, according to Random Lengths, which tracks prices based on the cost per 1,000 square feet.

The average price of a half-inch thick sheet of southern pine plywood was $242 a year ago, $530 last week and $538 this week, according to Crow Publications Inc., a Portland, Ore., company that publishes an industry newsletter.

The average price of a 7/16-inch thick sheet of oriented strand board was $161 a year ago, $446 last week and $463 this week, Crow reported.

“Isabel did not bring the same sort of price escalation that we saw in previous storms because prices were already on an upward trend,” said Sam Sherrill, editor of the Crow newsletter.

The storm represents the latest challenge confronting the wood-products industry this year.

Fires in the West and above-average rain in the Southeast have prompted some mills to curtail production. Even in areas where fires are under control, logging restrictions are still in place.

Also, the Department of Defense bought 24 million square feet of plywood and oriented strand board in August for reconstruction work in Iraq, but industry officials said that is a relatively small amount and is not expected to create a major imbalance in supply.

Home Depot Inc., the nation’s largest retailer, shipped 1 million 4-by-8-foot sheets of plywood to its Mid-Atlantic stores in the days before the storm arrived, according to spokesman Don Harrison. The retailer’s policy is to not raise prices on emergency supplies like plywood once the National Hurricane Center has named a storm, he said.

“The worst thing you can do is create the perception that you are trying to take advantage of your customers in a storm,” Mr. Harrison said.

A spokeswoman for Georgia-Pacific Corp., the Atlanta paper and building products giant that supplies plywood to Home Depot, Lowe’s Cos. Inc. and other major retailers, said it has been able to keep up with demand.

Georgia-Pacific shipped 5.64 billion square feet of soft-wood plywood in 2002, Robin Keegan said. “It’s safe to say we’ll surpass that this year,” she said.

This article is based in part on wire service reports.

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