Wood-based panel products

a changing industry in the United States

Robert N. Stone and George A. McSwain

ROBERT N. STONE and GEORGE A. MCSWAIN are, respectively, Forest Economist and Assistant Director at the Forest Products Laboratory of the US Forest Service Madison, Wisconsin.

The fastest growing segment of world markets for manufacturers of wood products is panels. Consequently, the wood-based panel industry in the United States is changing in response to new products, the housing market and innovation.

The United States manufactures and consumes a large number of wood-based panel products: softwood plywood, decorative hardwood plywood and veneer, particle board and medium-density fibreboard, waferboard, and other structural composite boards, hardboard, and insulation board. The most important produced domestically is softwood plywood (Table 1). Consumption of decorative hardwood plywood and veneer is much lower than for softwood plywood, but three fourths of the hardwood plywood and one third of the veneer are imported (19). Particle board and medium-density fibreboard make up a fast-growing product group. The latest group on the scene is waferboard and other structural composite panels.

Since the recession of 1974-75, the wood-based panel products markets in the United States have recovered dramatically (Table 3). Most domestic wood panel manufacturers have been operating at or near plant capacities since late 1977. Consumption increased most in softwood plywood and in particle-board panel products.

Despite the current speculation about the seriousness of the economic slowdown in the United States, the general outlook for wood panel products for the 1980s is optimistic. The basis for this optimism is a combination of favourable market factors: five-year estimates of markets for structural wood panels-principally soft-wood plywood-indicate a steady growth pattern pegged to increased market diversification. For the first time, forecasts make prominent mention of structural unveneered wood panel products, a nomenclature coined to cover waferboard, composite panels, and layered, oriented strandboard (10).

During the 1980s, the number and proportion of middle-aged people will increase substantially. It is estimated that the number of US households headed by individuals aged 30 to 44 will increase by 700000 to 900000 annually throughout the 1980s (27,28). People in this age range tend to have higher incomes and to feel a need for new housing and furniture.

Conventional plywood will probably continue to be the mainstay of the structural panel market in the United States for the foreseeable future. Moves into new panel materials have been evolutionary rather than revolutionary and have been mainly spurred by the need to utilize raw materials more efficiently, thus introducing new materials and technologies benefiting veneered panel products as well as unveneered. To accommodate this new panel technology moves are being made to approve new definitions of structural-use panels in the American Plywood Association grading rules. These rules would permit qualified panels to be certified for certain applications, regardless of panel composition or configuration. The anticipated standards will embrace all structural panels through use of performance criteria. Performance standards establish test methods for measuring a product's ability to perform in a specific application. They are expected to replace the present voluntary product standard (a prescription standard defining the basic composition and how it is manufactured). Panels classified under performance standards are easier to use and specify, encouraging better utilization of the timber resource and making way for inclusion of new panel technology into one structural panel category. The adoption of this new method will not greatly affect the conventional plywood share of the total panel market but may cause small adjustments in the market share of the individual panel types (10, 14).

The largest use of wood panel products is in construction, particularly in new housing. Since the economic slowdown of 1973-74, construction of new houses in the United States has increased to over 2 million new units per year. The largest component of this market remains the single-family house.

Table 4 shows a continued strong demand for housing, particularly single-family houses. The impact of higher interest rates and slower economic growth is evident in the decline in housing production in 1979. This decline is expected to continue into 1980, with a rebound to about 2.5 million units produced annually late in the decade if normal economic growth resumes and inflation subsides.

In 1978, in the United States, 913 000 m³ of plywood and veneer and 27 000 m³ of hardboard were consumed in the manufacture of pallets, boxes, crates, and other wood containers, and for dunnage, blocking, and bracing. These uses have grown 5 to 7 percent yearly in the 1970s.

Non-residential construction. including building and non-building projects, is a major market for wood-based panel products. In 1976, 1,8 million m³ of softwood plywood were used in the non-residential construction sector. Another 9 million m³ of particle board, insulating board, and hardboard went into this use (18)-most of the hardboard and particle board in millwork and panelling, and most of the insulating board in roofs of buildings.

The outlook for increased wood-based panel use in the packaging. handling, and shipping of manufactured and agricultural goods in the 1980s is relatively bright. Total plywood and veneer use is expected to increase from approximately 900 000 m³ in 1978 to just over 1 million m³ in 1990 (23). The use of hardboard is expected to rise from 27 000 to 32 000 m³ and that of particle board, medium-density fibreboard, and other manufactured board products will also rise significantly (23).

In 1978, some 340 mills were producing wood-based panel products. Of these, 55 percent made softwood plywood. Another 22 percent of the mills produced particle board and medium-density fibreboard.

A proliferation of particle board, waferboard, or strandboard plants in the eastern half of the United States is expected in the near future. Southern pine-plywood plants now account for 40 percent of the softwood plywood manufactured in the United States. However, it is anticipated that plywood plant construction in the South will slow down as the available lumber base becomes more fully committed and new capacity will be added in the West to replace old and inefficient facilities now closing (24, 30).

Research, technology and market innovations

Numerous innovations and improved technologies have resulted in the many wood panels available. Most serve end uses once served by lumber, but some are finding original markets. Much of the research and many of the technological advances mentioned here represent further progress, improvements, or refinements of developments outlined in the meeting of the FAO Committee on Wood-Based Panel Products of November 1977 (32).

The panel products which will likely receive most attention from researchers in the 1980s are reconstituted wood and composites of reconstituted wood and materials such as veneer, metals, and synthetic fibres.

The advancement of wood-bonding technology is of great interest. Increased cost of petrochemicals and natural gas (from which commercial wood adhesives are now synthesized) is spurring research and development of bark adhesives, binders based on tree foliage, lignin, and lignosulphonate adhesives. Efforts are under way to modify wood surfaces chemically in order to enhance bonding of the synthetic adhesives now used, or to develop self-bonding of wood particles to each other. More efficient use of the synthetic adhesives may permit their continued use inasmuch as lesser quantities of these adhesives will be needed.

The optimistic outlook for panel products in the 1980s may be dampened by anticipated price rises in wood derived from the petrochemical industry and a variety of environmental concerns. Adhesive bonding research is now a high-priority mission in most US Government, university, and private laboratories associated with the wood products industry. In the area of environmental protection and human safety and health, specific goals have been established to remove some of the uncertainty about panel production facilities needed in the 1980s.

Perhaps the major concern relative to the panel products industry in the United States is the effect of formaldehyde vapour on human health. The current standards for worker exposure to formaldehyde vapour set by the Occupational Safety and Health Administration (OSHA) include the following: The 8-hour, time-weighted average formaldehyde vapour concentration in the workplace air must not exceed 3 parts per million (ppm). Also, the concentration must never exceed 10 ppm at any time nor exceed 5 ppm for any 30-minute period during the 8-hour exposure. The National Institute for Occupational Safety and Health (NIOSH) has recommended that the 30-minute concentration be lowered to 1 ppm. This recommendation has not yet been adopted by OSHA.

Wood dust in the workplace has been a concern from the standpoint of employee respiratory and skin health and dust explosions.

Standards which OSHA have adopted for prevention of dust explosions in wood-working facilities are contained in sections of the 1962 edition of the National Fire Protection Association (NFPA) Standard No. 664. A drastically revised edition of this standard was nearing completion in December 1979.

The exposure of consumers to formaldehyde vapour from use of urea formaldehyde-bonded wood panel products in interior construction has also caused considerable and consumer concern. The Federal Consumer Products Safety Commission has not yet regulated the use of these products in interior construction. Recent news reports covering preliminary tests on the effect of formaldehyde vapour on the development of nasal cancer in laboratory rats have attracted much publicity and may affect the stringency of future regulations.

Table 1. 1978 production and number of US panel mills

	1978 production	Number of mills
	Million m³
Softwood plywood	17.6	187
Hardwood plywood	1.4	26
Particle board (includes MDF)	7.3	76
Hardboard	2.1	28
Insulating board	3 9	23

Source: World wood review, 1979, D.B. McKeever World Wood, 20(7): 33. stringency of future regulations.

As a result of some of the shortcomings of the formaldehyde-based binders, isocyanate-based binders are attracting some attention. While free-formaldehyde release is not a problem with the more water-resistant phenolic resins, they have minor difficulties due to alkalinity, long pressing cycles, and possible water pollution. Characteristics of isocyanate-bonded boards indicate they offer excellent moisture resistance, stiffness, and freedom from formaldehyde emission. Naturally, therefore, they are thought of as possible alternatives to existing plywood and particle-board resins. Certain other technical problems must be solved, however, before they become the first universal binder capable of replacing existing binders (12).

Thus, while the 1980s will have their challenges, the United States panel products industry should meet those challenges with a variety of new board products, manufactured in a cleaner, safer environment.

Plywood and veneer

The American Plywood Association anticipates little decline in the demand for conventional softwood plywood in 1979 despite a drop of about 12 to 14 percent in housing starts in that period. This performance is attributed to programmes promoting use in non-housing and remodelling markets which are estimated to absorb about 60 percent of the 1979 plywood use (25).

Promotional activities for 1980 include emphasis in four major areas, including residential construction, home repair and remodelling, industrial, and non-residential construction. A goal has been established of increasing plywood's present 27 percent share of the national non-residential roof-deck market to 40 percent by 1985. A computerized pallet-design programme to] benefit designers, fabricators, and users will be established to foster greater plywood use. A toll-free telephone "hot line" will be provided for key industrial specifiers and users to receive rapid service on pallet designs or needs with computerized accuracy (6, 25).

Table 2. US board production, 1970-79

Year	Plywood ¹		Insulation board 2	Hardboard2	Particle board 1,3
	Soft-wood	Hardwood
	Million m³
1970	12.5	1.6	3.8	1 .3	3.2
1971	14.5	1.7	4.5	1.5	4.2
1972	15.8	1.9	4.6	1.7	5.5
1973	15.8	1 .7	4.6	1.8	6.2
1974	13.5	1.4	3.9	1.7	5.5
1975	13.9	1.1	3.4	1.5	4.6
1976	15.8	1 .2	4.0	1.8	5.7
1977	16.6	1 .2	3.9	1.9	6.4
1978	16.8	1 .4	3.9	1.8	7.8
1979	16.8	1 .5	3.8	1.8	8.3

¹Source: 1970-1974, Demand and Price 1976-77, Phelps 1975, Outlook for Timber Products, Nov. 15, 1978, Phelps 1976-1979, Outlook for Timber Products, Nov. 8, 1979, Phelps. _ 2 1970-1977, Hard-board and Insulation Board Plants in the US, 1979, McKeever: 1978-1979, Outlook for Timber Products. Nov. 8 1979, Phelps. - 3 Includes medium- density fibreboard.

Technical developments in the plywood and veneer industry have been primarily in pursuit of improved methods to handle small logs and attempts at further automation. Improvements continue in. developing high-speed clippers, automatic chucking, electronic defect sensors, and the like. Increased production in veneer mills depends heavily on electronics and electronic controls.

The larger veneer plants are computerized at nearly every stage of production. Besides controlling routine operations, computers detect problems and report statistics varying from speed and quantity of production to what causes downtime. Many lathes peel up to 275 m per minute, although the veneer ribbon slows to 85-104 m per minute through scanners and clippers. Conditioning chests are also programmable. Some plants produce up to 265 000 m³ annually.

Steam-heated solid nosebars are also in use in some plants in North America. This is a development of the Western Forest Products Laboratory in Vancouver, British Columbia, which provides for set-up only once every three months instead of once weekly with conventional equipment (2, 15). To augment both quantity and quality in production, increased emphasis and improved developments have taken place in continuos-core and panel-lay-up systems. Switching from conventional glue spreaders to continuous systems permits better core utilization and less manpower requirements. An added large benefit, in view of rising adhesive costs, is a considerably tighter control of glue application through use of spray booths.

Work continues on veneers that are thinner and thicker than conventional sizes. Two newer products using softwood plywood are gaining markets in the United States. These are the All-Weather Wood Foundation and the underfloor plenum systems. The wood foundation is a well-engineered house foundation of plywood and lumber panels treated by preserving and designed as substitutes for poured concrete and concrete block, or cinder block foundation systems. The wood foundation can be installed when temperatures are too low for constructing with other systems. The plenum underfloor system uses a treated plywood and lumber crawl space system which does not require a duct system for either heating or cooling-resulting in a considerable construction cost saving (4, 8).

Higher fuel costs have stimulated investigations to improve drying procedures and equipment, to conserve heat, and to recycle waste heat to less demanding needs. This area of research will certainly gain attention in the next several years. Also under study are ways to use waste wood dust and bark for power. The goal of energy self-sufficiency is common in the forest industries.

Plywood has been used to a limited extent as a decking material in pallet construction for over 20 years. Tests made by the American Association indicate that, although plywood pallets have a higher initial cost, the cost per use of plywood pallet can be as much as a third less than that of conventional lumber pallets (1). This is due, in part, to the longer life span of plywood pallets (averaging seven years as compared to four years for a lumber pallet) and a lower incidence of damage, which means lower repair costs. Overall, plywood pallets have been estimated to cost 20 percent less per pallet per year than lumber pallets. However, their lower lifetime cost has not resulted in any dramatic increase in their use. Many pallet users are unwilling to pay the higher initial cost for plywood pallets because, too often, they are not returned after shipment, or a lower quality pallet is returned instead.

The advantages suggest that plywood as a pallet decking material will increase throughout the 1980s, at the expense of the all-lumber pallet (22). The American Plywood Association's commitment to a promotional effort to increase plywood's share of the wood-based pallet market seems to support this premise. Plywood for pallet bins is also a large potential growth market, due to the reduced distribution costs in the handling of farm produce. As better systems for the return of pallets are developed, users will become willing to invest in the higher quality kind. Also, mechanized and automated materials handling systems are now being developed which require higher quality pallets.

Many companies in the United States are operating on a two-tier pallet system. High-quality plywood or hardwood lumber pallets are used to move goods within the companies' own warehouses and distribution systems. Lower-quality pallets or slip-sheets are used to ship finished goods to the consumer.

Particle boards

Progress in the particle-board industry reflects the search for expanding markets. This product's greater use has been in housing floor underlayment, where it is covered with carpet, and in mobile-home construction as subflooring. A number of opportunities are developing in shipping and packaging applications. Although moulded particleboard pallets have been produced in Europe for several years, they have just recently been introduced to the United States. They are lightweight, require no nails, and can be shipped or stored in only about 25 percent of the space required for standard lumber pallets. Current and projected estimates indicate they can be manufactured and sold at prices competitive with lumber pallets (42). They c an also be readily fabricated into numerous designs to meet required end uses.

Table 3. United States board consumption and trade, 1976-78 actual, and 1979, 1980, and 1990 projected

Product	Year	Domestic production	Imports	Exports	Apparent consumption
	Million m³
Softwood plywood	1976	15.8	¹	0.6	15.2
	1977	16.6	¹	.3	16.3
	1978	16.8	0.1	.3	16.6
	1979	16.8	¹	.4	16.4
	1980	16.1	¹	.3	15.8
	1990	2	2	2	22.9
Hardwood plywood	1976	1.2	2.1	1	3.2
	1977	1.2	2.0	1	3.1
	1978	1.4	2.2	1	3.6
	1979	1.5	2.0	1	3.5
	1980	1.4	1.9	1	3.3
	1990	2	2	2	4.1
Particle board 3	1976	5.7	.2	.2	5.7
	1977	6.4	.2	.2	6.4
	1978	7.8	.4	.2	8.0
	1979	8.3	.4	.2	8.5
	1980	8.5	.4	.2	0.7
	1990	2	2	2	10.9
Hardboard	1976	1.8	.2	1	1.9
	1977	1.9	.2	1	2.0
	1978	1.8	.3	4	2.1
	1979	1.7	.3	4	2.0
	1980	1.7	.3	4	2.0
	1990	2	2	2	3.2
Insulating board	1976	4.0	4	4	4.0
	1977	40	4	4	40
	1978	4.0	4	4	4.0
	1979	40	4	4	40
	1980	4.0	4	4	4.0
	1990	2	2	2	4.5

Source: Reference (23).

¹ Less than 44 thousand cubic meters. - ² Not estimated. - ³ Includes medium-density fibreboard. Mende-process board and waferboard. - ⁴ Less than 43 thousand cubic meters.
Note: The projections presented for 1979 and 1980 are based on the trends in major markets. Projections for 1990 are based on assumptions of medium levels of population growth and economic activity. None of these projections should be viewed as forecasts of actual volumes. Data presented are subject to rounding.

By 1980 there will be at least two moulded particle-board pallet plants in operation in the United States. One plant recently began production in Dover, Ohio, using the German Werzalit process and whole-tree chips as raw material. The owner reports brisk sales to a wide variety of industries with plans for expansion of his production facilities in 1980. He also reports that the light weight of his pallets enables him to sell them to customers as far away as California (22).

A second moulded particle-board pallet plant is nearing completion in the Detroit, Michigan, area to serve the automotive supply industry. This plant will be the first to use a new process developed by the Institute of Wood Research at Michigan Technological University, Houghton, Michigan. A US patent is currently pending. The pallet reportedly can be manufactured in either a single- or double-deck configuration, both of which allow four-way entry by standard forklift equipment. Double-deck pallets are commonly used by the grocery industry, the largest single market for pallets (22).

Several companies are known to be keenly interested in the Michigan Tech pallet process and are currently conducting independent feasibility studies. Based on preliminary industry reports, moulded particle-board pallets could become competitive with the standard lumber pallet in the 1980s (22).

Research is currently under way by the US Department of Agriculture, Forest Service, to determine the feasibility of using medium-density fibre-board (MDF) for the top decks of pallets (26). A board with a density of 625 kg/m³ approximately 25 mm thick would be required to equal or exceed the performance of a conventional red oak pallet having decks of 20 mm-thick lumber.

It is estimated that an MDF-decked pallet would cost approximately :30 percent more to produce than an all-lumber pallet, at current raw material prices. If this cost differential can be reduced, these pallets would become attractive to owners of mechanical or automated pallet system, where the increased dimensional stability of MDF pallets would be desirable (26).

End panels of particle board are being used in food-produce crates with corrugated board "wrapped" around the sides instead of veneer.

Lumber and plywood have continued to be popular for packaging large, bulky items or heavy products. These materials are also necessary for the protection of delicate instruments, glass, ceramics, and the like. Recent field reports indicate that some shippers are using waferboard for these boxes in an attempt to reduce their costs.

Moulded products from wood, in general, whether to form moulded panel-type products or allied moulded-particle, lumber-type products, may soon receive greater attention. This possibility was largely ignored for years since plastics were much easier to use. However, plastics require substantial materials from increasingly costly petroleum, and moulded wood products now possibly make more economic sense (6).

Waferboards, flakeboards, and strandboards

A combination of technology, markets, and availability of resource.; has caused a veritable explosion of waferboard production in North America. It is claimed that Bemidji, Minnesota, may be on the way to becoming the "waferboard capital" of the continent. Seven new plants and two plant expansions are currently planned or under construction in that area. Plant capacity is at present about 10 percent of the total North American capacity. It is expected! that this will soon increase to about 55 percent, with US plants going from the present one to seven plants. The total increase in US-Canadian production will be approximately 121 per cent. Also, three additional plants--. two in the United States and one in Canada-are in the preliminary planning stage. Existing capacity is about 96 500 m³. Planned expansions equal about 93 000 m³. Plants under construction and firmly planned will have a production capacity of about 862.9 thousand cubic metres, raising the total new combined capacity to about 955.8 thousand cubic metres (17).

Another type of structural board, which will soon be manufactured in commercial quantities, uses flakes or strands thinner than those commonly used in waferboard. These flakes or strands are aligned, thus improving panel strength. These panels will likely be used in floor and roof sheathing markets where structural strength is important. They represent one type in a family of panels commonly referred to as Oriented Strand Board (OSB) panels. A plant to manufacture three-layer panels composed entirely of oriented strand-particleboard layers substituting entirely for veneer is presently under construction in the United States. This $31 million plant is scheduled for completion in 1981 and will be the first in the United States to produce an all-OBS panel. It is expected that this plant will further expand output from present plans for sheathing panels (3, 7, 16) to single-layer flooring, textured siding, and overlaid interior panels.

Still another type of new structural panel combines an OSB core with veneer face and back material, each component produced separately, and laid up on a conventional plywood line. The resultant panel looks like a plywood panel and is frequently used interchangeably with plywood. It has had very good market acceptance in the United States. One plant has been in production for more than three years and several others will soon begin production.

A similar board with a non-aligned particle core has recently been introduced using an isocyanate adhesive as the binder. This is the first commercial use of this binder for a wood board product in the United States. This board is reportedly marketed for wall and roof sheathing as well as for concrete forms. Called Elcoboard, it is manufactured in Baker, Oregon, and takes a slightly different approach in components-veneer, particle-board mat for core, and veneer again-on a particleboard line. It has been marketed in limited quantities since 1977, when a pilot-scale plant was operational. However, a commercial plant has been in operation now since the summer of 1979. This panel has a core made of randomly formed planer shavings. Knot holes in the CD face and back veneers do not require patching since the core material squeezes through under pressure to fill the void. Also, dry planer shavings require no further drying since a moisture content of up to 20 percent is permissible by using the isocyanate binder. This plant cost $5.5 million (29).

A new process for improving particle board quality is also being installed in some southern plants: it uses steaming vessels to condition shavings before they are pressed, thus turning out a product that is lighter and less dense. The product retains the same physical strength but is easier to machine, saves freight, and has more consistent integrity in face and edges (13).

Some plants are also using air classifiers ahead of milling and drying operations, which permits raw materials to be stored in single bins regardless of moisture content, species, particle size, etc., and processed in one "in-line" flow system. This permits reduction in refiner capacity since on-size materials are separated ahead of refiners and blown directly to the dryer feed (11).

Energy, wood fuels, and environment

The rapid and large increases in the cost of petroleum-based fuels and products continue to affect the production and marketing of wood-based panel products in a number of ways. It has raised the cost of raw materials and transport, and led to higher rates of inflation, slowing economic growth and the demand for panel products.

The effects are not evenly distributed; consequently, all the changes have not been adverse. Costs of energy-intensive plastic, metal, and fibreglass substitutes are improving the relative price competitiveness of wood-based panels.

Many of these products were developed to make use of wood residues from sawmills, planer mills, and harvesting operations having a nominal price. Wood residues now have substantial fuel value. With each increase in oil prices, more of the residue becomes priced for fuel as it rises above raw material price levels for panels. Furthermore, increasing competition for available supplies comes when this material is burned for fuel.

Table 4. US housing production by type of unit, 1975-79

Year	Single family houses	Duplexes and apartments	Mobile homes	Total all types
1975	895	276	213	1 384
1976	1 166	381	246	1 793
1977	1 452	538	277	2 267
1978	1 435	588	276	2 299
1979	1 195	552	278	2 015

Source: Reference 18.

Another consequence is the effect on glue and adhesive costs. Anyone involved in the panel industry knows that petroleum and natural gas are the starting point for most of the adhesives used in that industry today. Aromatics from crude petroleum such as toluene and benzene are the source of many materials for synthetic resins. Benzene is the source of most thermo-setting resins, including the phenol-formaldehyde adhesives. Toluene is important because of its relationship to benzene. Approximately 9 percent goes to isocyanates. Virtually all thermosetting resins used for the wood products field depend on raw materials from crude oil or natural gas. Oil and energy crises throughout the world, therefore, affect availability and cost of chemicals on which the industry is heavily dependent (20).

The political and economic sensitivity of these materials is apparent, since their availability is not only affected by market conditions, but also by policies of the US Government or international governmental agencies. Toluene is extremely important to the gasoline industry as an octane booster. In 1979, approximately 40 percent of the total gasoline pool in the United States required unleaded gasoline.

This greater-than-ever demand for benzene and reduced supply for adhesives have had the obvious effect. At the beginning of 1979, a gallon of benzene sold for about 90 cents in the United States. By June 1979, the price had soared to about $2.30 a gallon. This helped push the June price of phenolic resins from some suppliers to double the January levels (9). Estimates indicate that about 75 percent of the gasoline pool will require non-leaded fuel by 1985. At present, the unleaded gasoline pool requires about 20 to 30 percent of the aromatics to maintain octane. Only 11 percent of total aromatics are available for the petrochemical industry.

Therefore, if more aromatics are needed by the gasoline industry by 1985, there may be substantial problems in the adhesive industry. About 2.6 percent of the petrochemical benzene made in the United States is needed for phenolic binders so any reduction in benzene supply is of great importance to the wood industry. However, of great importance is the fact that other aromatic boosters are available in the United States if approved by the US Environmental Protection Agency. This could have some moderating effect (20).

Natural gas is the other important raw material for wood adhesive, since it is the source of methanol and urea for producing urea-formaldehyde resins. US phenol- and urea-formal-dehydes consume about 55 percent of the total formaldehyde produced. The end of cheap natural gas in the United States could retard future domestic expansion of methanol plants.- The short-term outlook for chemical urea is excellent because of the proliferation of natural gas-producing countries worldwide, but methanol availability is uncertain because of the increasing probability of use in alcohol-gasoline blends (20).

As panel industry associates know, there has been concern recently about formaldehyde emissions and health effects, particularly when urea-formaldehyde resins are used. About 75 percent of the total urea-formaldehyde adhesives are used in particle board and medium-density fibreboard production in the United States. Technological improvements in both resin manufacture and application are expected to continue to reduce the problem of free-formaldehyde in panels utilizing these binders. But alternate binders are not expected to replace the urea-formaldehydes because of the huge amounts and of the time required for manufacturing and distribution systems to operate, even if a suitable alternative were available. There is no known shortage of manufacturing capacity for urea-formaldehyde and melamine-formaldehyde resins. In the short term, at least, sufficient resin production capacity is in place or can be easily installed to handle synthetic resins required for adhesives for the softwood plywood industry (20).

There are significant relationships between the economics of wood products in the United States and those of the petroleum and natural gas industries. This was discussed by Tom Maloney, of Washington State University, in the November 1979 issue of the American trade publication, Plywood and Panel Magazine, and by John T. White, of Reichold Chemicals, in a paper to the 1979 meeting of the Forest Products Research Society, published in the Forest Products Journal, November 1979. Some of their more important points are summarized in the next few paragraphs.

As noted earlier, demands on the dwindling petroleum supplies for energy purposes have resulted in a quickening of the search for alternative adhesives and binders from bark or wood derivatives, which might provide assured supplies and stabilized prices. However, the industry still remains highly dependent on two synthetic resins - phenol-formaldehyde and urea-formaldehyde - and tight supplies and climbing prices could and may occur. Petrochemical feedstocks are subject to higher priority uses for such things as gasoline octane boosters and, unless substitutes are authorized, increases in prices and unavailability could result. Other industries (for example the plastics industry) require the same raw materials and competition, therefore, could very well force price escalations. On the brighter side, gasoline demand in the United States is declining. Also, there will be an increase in domestic natural gas production, assuring materials derived from natural gas for the next two to three years for use in binders and coatings (20).

Potential octane boosters, such as methyl tertiary-busy] ether, are available and could free as much as 17 percent of the aromatics now used in the gasoline pool. These have to be permanently approved however. It is hoped they will provide sufficient raw material for the petrochemical industry in the near future. Wood-product synthetic binders compare favourably in cost with binders used in non-wood applications. Therefore, the wood industry should be competitive in obtaining adequate supplies (20).

Substantial success has been achieved in some industrial settings in saving energy through rather simple conservation. measures. Close monitoring of heating and lighting, for example, is economical with current fuel prices. Wood burning for steam, co-generation, and other energy-adjusting measures are being closely studied in American wood-based panel firms. Clearly. this industry will continue to be forced to change if energy costs rise as expected.

One further energy effect may influence the location of future structural 'board plants in the United States. As indicated previously, numerous wafer-board plants are either under construction or scheduled for construction in the hardwood-producing eastern portion of the United States. This proliferation is influenced not only by the greater availability of hardwoods as compared to softwoods, but by the increased costs of energy for transportion. About 75 percent of the markets are in the eastern half of the United States. With increased energy costs, transportation rates become more critical, making closeness of markets a distinct advantage.

Environmental protection effects

Two kinds of actions directly influence the wood-based panel industry: those concerning the processing environment, such as worker safety, dust, exposure to toxic substances, noise, and the like, and those concerning the product in use-flammability, fire spread, exposure to toxic fumes, residues, biodegradability, and aesthetic aspects-which affect the consumer.

The immediate problem that looms largest is in the area of formaldehyde presence in mills and in certain types of structures. Particle board use in mobile homes is threatened by this problem.

The industry will face problems related to improving the environmental quality of living and working. But there seems to be no reason why competing products and firms should have any comparative advantage.

Table 5. Panel board prices in the United States

Year	Softwood plywood sheathing ¹	Hardwood plywood 2	Hardboard 2	Insulating board2	Particle-board underlayment ¹
1970	80	1.03	1.03	1.11	43
1975	135	1.20	1.18	1.44	67
1977	211	1.28	1.43	1.84	99
1978	235	1.35	1.57	2.12	143
1979	224	1.65	1.65	1.98	92

¹In dollars per thousand square feet. (Source: 1979 Random lengths Annual). - ²1967 = 1.0. (Source: 1919 US Department of Labor, Bureau of Labor Statistics, Producer prices and price indexes Annual).

References

AMERICAN PLYWOOD ASSOCIATION. 1975 Plywood design manual - pallets. Tacoma, Washington, 23 p.

2. BLACKMAN, TED. 1979 Big veneer plant relies heavily on electronics. Forest Industries, January 1979, p. 33.

3. BUILDING DESIGN AND CONSTRUCTION. 1979 Plywood substitutes begin grabbing market share. November, p. 22.

4. DICKERHOOF, H.E. 1973 Market potential for underfloor plenum construction. Forest Products Journal, 23(12): 10-13.

5. DICKERHOOF, H. EDWARD, YOUNG-QUIST, JOHN A. & CARLL, CHARLES, G. 1980 The wood-based panel products industry in the United States. Economic Commission for Europe, United Nations Symposium on Wood-Based Panels in the 1980s, Helsinki, Finland, 12-16 May 1980.

6. DIXON, ROBERT. APA 1979 unveils plywood promotions aimed at distributors, home builders. Plywood and Panel Magazine, December, p. 34-37.

7. DIXON, ROBERT. 1979 Elmendorf begins construction of OSB plant in New Hampshire. Plywood and Panel Magazine, October 1979, p. 23.

8. FASICK, CLYDE A. & DICKERHOOF, H. EDWARD. 1970 An underfloor plenum system for heating and cooling. Forest Products Journal, 20(1): 10-15.

9. FOREST INDUSTRIES. 1979 The benzene connection: glue prices soar. August, p. 13.

10. FOREST INDUSTRIES. 1979 Demand to increase for plywood, other structural panels. October, p. 11.

11. FOREST INDUSTRIES. 1978 On-size flakes bypass refiners, go to dryer. December, p. 30.

12. FOREST INDUSTRIES. 1979 Particleboard binder promises performance without emissions. April, p. 76-79.

13. FOREST INDUSTRIES. 1979 Particleboard made lighter, less dense. May, p. 55.

14. FOREST INDUSTRIES. 1979 Standards to embrace all structural panels. December, p. 11.

15. FOREST INDUSTRIES. 1979 Tale of two plywood plants. April, p. 60.

16. FOREST INDUSTRIES. 1979 Upturn in production coming for composite, OSB panels. September, p. 11.

17. FOREST INDUSTRIES, 1979 Waferboard boom. Plant capacity will more than double. June, p. 11.

18. FOREST SERVICE, US DEPARTMENT OF AGRICULTURE. 1979 An assessment of the forest and range land situation in the United States. Forest Service 345, Washington, D.C.

19. HENRY, DAVID K. 1979 Commodity trends: solid wood products 1977-78. US Department of Commerce, industry and Trade Administration, Washington, D.C. Forest Products Review, 35(1): 15-18.

20. MALONEY, LAMAS M. 1979 Board talk. Plywood and Panel Magazine. November, p. 12.

21. MCKEEVER, DAVID B. 1979 World wood review - USA. World Wood, 20(7): 33.

22. MCKEEVER, DAVID B. & DICKER HOOF, H. EDWARD. 1980 United States consumption of wood-based panels for packaging and shipping - an outlook for the 1980s. Economic Commission for Europe, UN Symposium on Wood-Based Panels in the 1980s, Helsinki, Finland, 12-16 May 1980.

23. PHELPS, ROBERT B. 1979 Outlook for timber products. Presented at 1980 Agricultural Outlook Conference, Washington, D.C., 8 November.

24. DEAN SHERMAN'S 1979 Forest Industry Affairs Letter, 12 (1 3), August.

25. SOUTHERN LUMBERMAN. 1979 American Plywood Association holds fall meeting in Nashville, November, p. 5, 6.

26. STERN, ROBERT K. 1979 Performance of medium-density hardboard in pallets. USDA Forest Service, Research Paper FPL 335. Forest Products Laboratory, Madison, Wis., 12 p.

27. US BUREAU OF CENSUS. 1975 Projection of the population of the United States: 1975-2050. Current Population Report Series P25, No. 601, 143 p.

28. US BUREAU OF CENSUS. 1976 Fertility of American women. Current Population Report Series P-20, No. 301, 70 p.

29. WOOD-BASED PANELS. 1979 New flake board plant costs $5.5 million. 24 November. International Editor, p. 48.

30. WOOD AND WOOD PRODUCTS. 1979 Five year forecast from APA. November, p. 12.

31. HOLZ-TECHNIK MOLDED PARTICLE BOARD PLANT AT SIEGERTSBURN, GERMANY (FR). 1979 Data published in Plywood and Panel Magazine, May 1979.

32. MCSWAIN, GEORGE A. 1977 Technical developments in the wood-based panel products industry. Committee on Wood-based Panels, Fifth Session, Food and Agriculture Organization of the United Nations, Rome, 9-11 November 1977.

33. STONE, RN. 1977 Are US wood supplies dependable and adequate? Paper presented at the Forest Products Research Society Conference on Energy Efficiency in Wood Building Construction, Chicago, Illinois, 8-10 November.