LP Building Solutions will indefinitely curtail OSB production at its Jasper, Texas, mill beginning in October 2026, taking approximately 475 million square feet of annual production capacity on a 3\/8-inch basis out of operation. The decision comes after a sharp deterioration in LP's OSB results during the first half of the year, with lower prices and volumes turning the segment from profit to loss.<\/p>\n
LP said the Jasper decision followed a review of production requirements across its manufacturing network and current OSB market conditions. The company considered operating costs, capital requirements, logistics and long-term asset utilisation. LP described demand as soft and said it would continue evaluating production levels across its system, including the possibility of restarting curtailed capacity when market conditions warrant.<\/p>\n
The company has not announced the closure of Jasper. The measure is an indefinite production curtailment, and LP has not provided a date for a potential restart. Employees affected by the decision will receive job-search and career-transition support and assistance applying for positions at other LP facilities.<\/p>\n
OSB sales fall sharply in 2026<\/strong><\/p>\n The Jasper announcement follows two weak quarters for LP's OSB business. In Q1 2026, OSB net sales fell to $168 million, down $99 million from a year earlier. By Q2, quarterly OSB sales had increased slightly to $182 million but remained $68 million below Q2 2025, equivalent to a year-on-year decline of around 27%.<\/p>\n For the first six months of 2026, LP reported OSB sales of approximately $350 million, down $167 million year-on-year. The company attributed the decline to both lower prices and lower sales volumes.<\/p>\n The deterioration was particularly visible in Q2 earnings. LP's OSB segment recorded an adjusted EBITDA loss of $21 million, compared with positive adjusted EBITDA of $19 million in Q2 2025. For the first half of 2026, OSB adjusted EBITDA was a $33 million loss, compared with positive adjusted EBITDA of $73 million in the corresponding period of 2025.<\/p>\n LP quantified the effect of the weaker OSB market in its Q2 results. Lower OSB prices reduced adjusted EBITDA by $35 million in Q2, while lower volumes had an additional $11 million negative impact. For the first six months, lower OSB prices reduced adjusted EBITDA by $101 million, with lower volumes accounting for another $21 million.<\/p>\n The comparison with late 2025 shows that the weakness is not confined to the latest quarter. LP reported OSB sales of only $136 million in Q4 2025, down $132 million from the same quarter of 2024.<\/p>\n LP sharply lowered its 2026 OSB outlook<\/strong><\/p>\n LP's expectations for its OSB business also deteriorated between the first and second quarters.<\/p>\n Following its Q1 results in May, the company guided for an OSB adjusted EBITDA loss of approximately $40 million for full-year 2026, based on the assumption that Random Lengths OSB prices remained at their May 1 levels.<\/p>\n By August, after the Q2 results, LP had revised that figure to an expected $120 million full-year OSB adjusted EBITDA loss. For Q3 alone, the company projected a loss of approximately $45 million. These estimates assumed that OSB prices published by Random Lengths remained at their July 31 levels; LP explicitly stated that this was a modelling assumption rather than a price forecast.<\/p>\n The change means LP's projected 2026 OSB loss deteriorated by $80 million between its May and August guidance.<\/p>\n Prices have done more damage than volumes<\/strong><\/p>\n LP's detailed Q2 figures also show that prices have been the larger problem.<\/p>\n In the second quarter, commodity OSB average selling prices were 20% lower year-on-year, while commodity OSB sales volumes decreased by only 1%. Structural Solutions average selling prices declined by 10%, while volumes fell 24%.<\/p>\n Total OSB shipments amounted to 768 million square feet in Q2 2026, compared with 880 million square feet in Q2 2025. For the first six months, shipments fell to approximately 1.47 billion square feet, from 1.70 billion square feet a year earlier.<\/p>\n The combination of lower prices and lower shipments explains the deterioration in segment earnings. LP's own figures show that the price effect has been substantially larger than the volume effect during 2026.<\/p>\n What LP has actually changed in 2026<\/strong><\/p>\n The Jasper announcement is the major OSB production curtailment announced by LP in 2026 in the company's current releases. The mill's approximately 475 million square feet of annual capacity will be indefinitely curtailed beginning in October. LP has not described the facility as permanently closed.<\/p>\n At the same time, LP has continued developing specialised OSB products. In March 2026, the company launched LP BurnGuard FRT OSB, a fire-retardant-treated structural panel designed particularly for multifamily and other applications requiring fire-rated assemblies. LP describes it as the first commercialised fire-retardant-treated OSB certified to meet the relevant IBC and IRC definitions for FRT wood structural panels.<\/p>\n LP has also announced additional manufacturing investment in 2026, but not in commodity OSB capacity. In June, the company broke ground on a new SmartSide ExpertFinish Trim & Siding facility in North Branch, Minnesota. The approximately 350,000-square-foot plant is being built on a 120-acre site, is expected to create 125 jobs at full capacity and is scheduled to begin production in Q1 2028.<\/p>\n That project belongs to LP's Siding business and should therefore not be presented as an OSB capacity expansion.<\/p>\n Jasper becomes LP's direct response to soft OSB demand<\/strong><\/p>\n The figures reported by LP show a clear deterioration during 2026. OSB sales fell sharply in Q1 and remained well below the previous year in Q2. The segment moved into adjusted EBITDA losses, with LP identifying lower OSB prices as the largest individual factor behind the deterioration. Its full-year OSB EBITDA guidance then moved from a $40 million loss in May to a $120 million loss in August.<\/p>\n On September 1, LP announced that Jasper's 475 million square feet of annual OSB capacity would be indefinitely curtailed from October. The company linked the decision directly to soft demand and current OSB market conditions, while stating that production requirements will continue to be reviewed across its manufacturing system.<\/p>\n Jasper is being curtailed, not permanently closed, and LP has not announced a date for restarting production. The company's 2026 results nevertheless show the scale of the pressure on its OSB business: first-half sales fell by $167 million year-on-year, adjusted EBITDA moved from a $73 million profit to a $33 million loss, and the full-year loss projected for the segment was increased substantially between May and August.<\/p>","protected":false},"excerpt":{"rendered":" LP Building Solutions will indefinitely curtail OSB production at its Jasper, Texas, mill beginning in October 2026, taking approximately 475 million square feet of annual production capacity on a 3\/8-inch basis out of operation. The decision comes after a sharp … Continue reading