The current UK MDF market couldn’t be more straightforward: demand is healthy and supply is consistent.
Sales are steady across all grades and into most sectors, including furniture, joinery and shopfi tting.
One of the few negative points noted was some competitive pricing as some traders tried to get volumes up.
“It’s a very rooted market,” said one merchant. Supply is perfectly good and demand is ticking along nicely,” “In raw board especially, it’s steady as you go, there’s nothing exciting happening.” When the pound strengthened against the euro, European producers tried to place more product on the UK market but now they were “pulling the horses back” and there was more of a traditional market, one manufacturer told TTJ.
Having held prices for some time, manufacturers introduced increases of around 5% in May.
“Demand is good so manufacturers decided it was time they could push prices up. They’re fairly bullish and I can’t blame them. If they didn’t go for increases in May they wouldn’t get them until October or November,” said a distributor.
While nobody further along the supply chain liked increases he believed his customers were ready for a rise.
“They’ve had price reductions over the last couple of years so they have to accept what goes down can go up,” he said. One merchant was slightly more begrudging.
“I think the price rise is taking liberty a little bit. The exchange rate is obviously affecting imported product but a lot of the MDF sold in the UK is made in the UK so I think they’re just trying to get the pricing up while everything else is going on,” he said. The main customers at his branch were smaller builders who were providing good demand for MDF mouldings.
“In the RMI market our customer, the jobbing builder, will go for the easier fixing option for mouldings, which is MDF,” he said. Another merchant echoed this experience.
“The biggest part of the MDF market is MDF mouldings, which is still a very competitive market, and there are more people coming into it – Donaldsons has a new MDF plant in Scotland, so that increases capacity. Arbor Forest Products is also increasing capacity and they’ve only been in the market for a couple of years,” he said. With more players coming into the market and new capacity coming on stream there would be pressure on all MDF mouldings manufacturers to continue to invest, he said. The investments that were taking place were a reflection of the confidence that the market, and the perception of MDF mouldings, would continue to grow. \ “Ten years ago you wouldn’t have used MDF mouldings for prestige properties because they would have been perceived as too clinical and cheap and cheerful, whereas now they’re becoming the norm,” he said. “MDF mouldings are cutting into the lower, middle and top end range of the market and I can’t see why it would change.”
MDF mouldings are taking market share from softwood and that’s going to continue, helped by the fact that mouldings lines provide the flexibility to process relatively small batch runs of special sections. MDF could also provide a substitute to hardwood plywood, a contact told TTJ.
“Where would you use hardwood plywood today? A mass of it is still consumed but I think demand is declining and when working internally more and more people will substitute MDF for plywood to get a consistent, reliable product sheet after sheet,” the contact said.
The price difference added to MDF’s favour. He warned that unless customers could have confidence in hardwood plywood’s quality and sourcing it could suffer the same fate as blockboard.
“Where MDF really took the market was blockboard. It’s a product we’ve forgotten about but 20 years ago it was massive; now it’s extinct. I think hardwood plywood could go the same way.
“It’s a slow decline but MDF is definitely eating into that market all the time,” he said. He also predicted that as exterior MDF became more competitively priced it too could eat into hardwood plywood’s position. While European panel producers were producing products that were what they said they were, it wasn’t always the case with hardwood ply from other sources, he argued. “The trouble with plywood is that people don’t have confidence in the specification, how to understand the specification and whether they’re really buying to the specification. MDF is taking advantage of that turmoil,” he said.
But in the shorter term traders expect no change in the MDF market over the summer and into the autumn.
“I think it’s going to be steady all the way through,” said a distributor. “I can’t see anything that’s going to destabilise it. I don’t think we’re going to see any huge increases in demand but I don’t think there’s anything that will stop demand either.”
No slowdown is expected over the summer either as the summer silly season seems to be a thing of the past.
“There’s been discounting over the past year or two but it’s not necessarily tied to the summer period. Nowadays you get more distortion of figures around Easter and May Bank holidays as people take longer holidays around those periods than they used to,” said the distributor.
