An increasingly positive global economic outlook and strong growth in housing demand will drive renewed growth for medium density fibreboard (MDF) over the four years from 2010 to 2013, according to BIS Shrapnel.
BIS Shrapnel’s Medium Density Fibreboard in the Pacific Rim and Europe, 2009 — 2013 report forecasts strong growth in the key end-use sectors for MDF — housing construction and furniture manufacturing.
BIS Shrapnel says the downturn in housing construction in the United States reached the bottom of the cycle in 2009 and is expected to move into a rapid upswing from 2010 to 2013.
"MDF markets are now more mature and much more price competitive, which has driven producers to improve quality and develop new products and markets. There has also been a significant change in ownership structure — production has shifted from North America and Europe to China and Asia and over the forecast period this will continue," says Bernie Neufeld, report author and BIS Shrapnel senior manager.
"The effects of the global financial crisis will continue to limit new production facilities in North America and Western Europe but developing regions such as China, India, South America and South East Asia will expand rapidly."
Over the past few years there have been a wide range of new uses developed for MDF. Japan has been a leader in finding many innovative end-use applications for MDF, which are now spreading to other Asian countries, and European countries have lead the way in developing laminate flooring. Neufeld says many developing markets will also expand along these lines.
"There is potential for MDF to be used more extensively in many applications such as flooring, zero-rated formaldehyde emission MDF, MDF panels in place of plywood panels, and applications requiring fire and water rated MDF," Neufeld says.
BIS Shrapnel is forecasting consumption of MDF to grow at an average rate of around 5 per cent per year over the five year period 2009 to 2013. By 2013, North Asia will be producing 45 per cent of the world’s MDF, and China alone will be producing 41 per cent.
Noth Asia, the largest producing region for many forest products in the world, is facing a shortage of forest resources, which will only become more severe over the forecast period. BIS Shrapnel says other regions are also facing limited supply of forest resources.
The pine beetle infestation in Canada, apparently caused by a warming climate, will place significant constraints on the supply of resources in North America over the next decade. On the other hand, Russia has a huge potential resource of logs which have traditionally been exported to North Asia and, to some extent, Europe. This supply will dwindle as Russia implements strategies to add value to its forest resources by taxing the export of logs.
BIS Shrapnel’s forecasts for MDF prices are moderate as the global economy moves into an upward phase. Over the four years from 2010 to 2013 prices are expected to increase by an annual average of between 6 per cent and 7 per cent.
There is a danger of sharper price increases resulting from a declining US dollar and the development of high value-added products such as laminate flooring, mouldings and other products, which are in the high end of the price range and will result in higher average prices.
