European panels sector gathers in times of uncertainty

18 October 2022

European panel sector representatives came together in Belgium to hear about industry developments at a time of increasing economic uncertainty. Stephen Powney was there

Ghent was the historical background for this year’s European Panel Federation (EPF) AGM and General Assembly, with more than 100 delegates gathering in the Belgian city to hear about dynamics in international panels markets.

The first physical EPF summer annual conference to be held since the Covid pandemic started, the event was held against a background of excellent financial results for the European wood-based panels industries, yet palpable trepidation on the future direction of markets and the impacts that soaring energy costs may have on the industry.

Hence there was no celebratory feel, only a focus to understand the multiple forces being currently exerted on European economies due to the Ukraine conflict, the Covid pandemic, rampant inflation and supply chain challenges.

Despite the acknowledgment of more turbulent times, the EPF managed to look forward to playing a key role in the economy, in the environment and in society during the coming years.

This was symbolised by the ringing of the wood-based panels bell by EPF chairman Martin Brettenthaler and Veronique Hoflack, new EPF managing board member.

The symbolic act characterised EPF’s hopes to usher in a new era of sustainability in construction, furniture, packaging and other markets served by innovative, climate-smart wood-based panels.

Mr Brettenthaler said he was confident the panels sector’s innovation, dynamism and sustainability would help it to find opportunities in the current turmoil.

“But this is no longer business as usual,” he added.

“That is why we need our politicians to help secure the energy we need, and the wood we require, but not by burning the latter to supply the former. That is not the solution either in the long, medium or short-term.”

To this end, Mr Brettenthaler launched the EPF’s five new Strategic Directions: Role Model Industry, Climate, Wood Availability, Harmonisation and Regulation. These will be the focus areas of EPF’s work in the coming years.


European wood-based panel production was up 10% in 2021, according to the EPF’s Annual Report stats shared at the conference.

The EPF’s 2021/22 Annual Report presented at the AGM by EPF managing director Clive Pinnington showed combined production of European wood-based panels producers was 63.7 million m3 in 2021, offsetting a drop of 2.1% in 2020. The 2021 volume was a 7.6% increase on the pre-pandemic 2019 level.

Particleboard production grew by 12% in 2021 to 34 million m3, with Germany staying as Europe’s largest producer with an 18% share of production.

MDF volumes increased by 7.6% to 12.9 million m3, with Germany again the largest producer with a 26% market share.

OSB production climbed by 2% to 7.2 million m3 in 2021.

Softboard continued its meteoric rise with a 12.6% growth to 5.6 million m3, while plywood production rose by 12.2% to 3.2 million m3.

Compared to 2019, all these individual product areas were up in 2021.

Mr Pinnington said the EPF was proud of the figures for 2021 but “cautious” about the years ahead.

EPF chairman Martin Brettenthaler said the industry now faced a very complicated and challenging situation.

He referenced the challenge of raw wood and chemicals supply bringing upheaval and turmoil. He said some mills had issues with securing enough wood supply to maintain production.

The Ukraine conflict and resulting sanctions meant there was now even more of a tendency to burn wood for energy, thus competing with the panel industry for wood feedstock.

He referenced the high current price of energy wood at over €400 per tonne.

“Our industry is really facing a large raw material shortage,” said Mr Brettenthaler.

Mr Brettenthaler said the wood-based panels sector was a very energy intensive industry and that energy was in short supply, citing the possibility of energy rationing in some European countries this coming winter.

“For the EPF, we need to build on the resilience which we have shown in the pandemic.”

“We need to work together for the urgency of the situation, in all sectors not just the wood-based panels industry, to work with policy makers. There is not that level of urgency [with policy makers] at the moment.

“We need to tell the policy makers that photovoltaic panels and other renewable energy is not going to cut it. We need energy this winter.”

He urged a call for action, otherwise next year at the EPF AGM there could be a much more “dire ambiance and that’s not what we want to see”.


Frank Goecke, of consultants AFRY, gave a detailed look at where panel markets may be headed.

He explained that particleboard and MDF suffered a demand drop in 2020. China was the only region to keep positive PB demand development in the 2019-2021 period, with the eastern EU only slightly under water.

Western Europe had the biggest reverse during the period. Conversely, the eastern EU was the only world region to register positive MDF demand development in 2019-2021, with China noticeably suffering a drop, which provides evidence of an increasing shift from MDF to PB in China.

Losses were recovered in 2021 due to a strong demand.

OSB demand development was strong in 2019-2021, led by China and western Europe but unfortunately not for plywood because of log shortages and product substitution.

Mr Goecke signalled unfavourable signs on the overall economic outlook, with construction spending and furniture production predicted to see further decline.

He said particleboard demand would drop in 2022 and 2023 before starting to rebound thereafter. Turkey drove eastern European MDF demand recovery in 2021 (+500,000m3) but high inflation and the Ukraine conflict is driving a sharp drop in 2022 and for 2023.

Mr Goecke predicted OSB would suffer a stagnation in demand in western Europe, due to lower construction activity. Eastern Europe/ Russia would see a sharp decline.

On the plywood front, a shortage of birch plywood and limited substitution potential would hamper demand development of plywood.

In summary, Mr Goecke said the short-term contained many uncertainties that would challenge the supply and demand side. But the mid- to long-term saw the wood-based panels industry coming out of the recession even stronger.

“Wood supply to our industry will become challenging across all assortments, competition from the energy sector benefits from the energy transformation, while new industries – biofuels and biochemicals – will become additional demand points,” he said.

“We expect wood-based panel demand to drop in 2022 and 2023 but start to bounce back and recover thereafter, in construction, furniture and other end-use applications.”


Resins are, of course, a key component of wood-based panels and their pricing and availability are an important factor in panel manufacturers remaining competitive.

BASF director Wolfgang Gutting updated delegates about the wood binder market situation, focusing on the impact of gas prices and availability on chemicals and with special attention to urea.

European liquid natural gas (LNG) imports have been increasing to compensate for a reduction in Russian gas.

But Mr Gutting said building new LNG terminals would only deliver a medium-term solution and would not be ready for the coming winter. LNG imports from the US and Middle East have increased, but those from Asia are decreasing. LNG prices used to be €6/MWh, but it has broken €200/MWh with peaks of €280/MWh.

Mr Gutting said ultimately Russian gas was still needed.

“If it will come to an allocation and if Russia would stop gas deliveries via Nord Stream 1, then all industries will have a problem,” he said.

“It is therefore important to prepare for difficult times ahead, especially this winter, but gas prices are expected to remain high in the next four to five years.”

He signalled ammonia prices are following gas prices with a time lag, but if the gas prices get too high, ammonia production is stopped and then there is also no urea production.

“The situation we have at the moment is not sustainable,” he added.


The conference also heard about continuing challenges in international logistics. With Belgium being a major hub for container traffic, Wim Dillen, international development manager Port of Antwerp-Bruges, shared his expert knowledge of the sector and how it is faring.

The ports of Antwerp and Bruges merged in April 2022 into one single entity with two platforms – it is now the second largest port in Europe.

Mr Dillen said securing the supply lines is becoming increasingly difficult due to one crisis coming on top of the other. Container shipping prices have gone up dramatically – up to 10 times during the pandemic, though they have eased in recent months.

This situation is not expected to change anytime soon, particularly as the shipping lines are in the driving seat.

The average core EBIT for main carriers in Q1, 2022 was 57.4%, compared to 1-2% in Q1, 2019.

Furthermore, port congestion in northern Europe continues to worsen. Container vessels are “out of window” with an average delay of four to five days, while vessels need on average an extra 20 days to complete a full round-trip from the Far East to north-west Europe and back to the Far East.

The most congestion is on the west coast of the US but Europe is definitely the number two.

Mr Dillen said all ports were working to improve the situation, but it’s not going to get optimal in the next year.

“The outlook is very difficult for the future,” he said. “Nobody has a crystal ball, but if the Ukraine/Russia war escalates then the situation will become even more difficult.”

Meanwhile, the EPF saw a couple of changes taking place on its management board during the AGM.

Bernard Thiers, CEO of Unilin, resigned as vice-chairman and managing board member. Replacing Mr Thiers is Pablo Figueroa López, executive committee member of Finsa. And Veronique Hoflack, president of Unilin Panels, was elected to the managing board.

The Marriot in Ghent was the backdrop for this year’s EPF AGM and conference
AFRY’s Frank Goecke predicts a drop in particleboard demand in 2022 and 2023
Martin Brettenthaler (left) and Clive Pinnington at the EPF AGM in Ghent with the wood-based panels ‘bell’
BASF director Wolfgang Gutting updates delegates about the wood binder market situation
Delegates at the EPF General Assembly conference