18 | Sector Market Update: MDF
SUMMARY
■MDF demand has returned to more normal levels
■Producers are no longer supplying on allocation
■MDF mouldings are still selling well ■The merchant sector is generally quieter than other channels
■Price levels have been maintained to cover inflationary costs
MDF DEMAND SLOWS BUT SECTOR REMAINS OPTIMISTIC
The MDF market in the UK has slowed but the brakes are being eased on rather than squeezed. Keren Fallwell reports
After the dizzy heights of demand during lockdown, the UK’s MDF market has returned to a more normal tempo.
This time last year it was estimated that MDF demand was outstripping supply by 20-30% and customers were entering around their ninth month on allocation. Now MDF manufacturers are building inventory, lead times are back to normal and the seemingly insatiable demand has eased. A merchant said the change in market dynamics marked the time for “a reality check”.
“The last 18 months to two years saw unprecedented demand from consumers for the sort of work they perhaps wouldn’t normally do, such as home offices and landscaping. It’s now settling into more realistic levels of activity,” he said, adding that a lot of his customers were still busy. Views differ on the extent of the drop in sales volumes, from “quite significant” to demand “still being at a good level”, but the consensus is there has been a shift in MDF market dynamics, as there has been across other timber products.
As an illustration of how the market has changed, TTJ was told that in January one UK manufacturer intimated it would introduce a 10-15% price increase in April/May but the rise didn’t materialise.
Above: MDF manufacturers are building
inventory and lead times are back to normal PHOTO: MEDITE SMARTPLY
TTJ | July/August 2022 |
www.ttjonline.com “Until the war started in Ukraine it was still
100mph and it remained busy until the end of March. Now it’s quieter, with fewer emails
and phone calls. Allocations have come off and we’ve been able to take extra volume,” a distributor told TTJ.
There is certainly more product available now but one contact said it was unclear whether it was because of a noticeable drop in demand or the supply chain destocking. “Over the past two years there was an increase in demand and decrease in supply so people bought whatever they could. Now availability has improved but we have cost inflation and uncertainty so the first thing you do is try to reduce your working capital. We’re clearly seeing destocking but there’s also lower demand so it’s difficult to judge what the real demand is,” said the contact.
Several others said the merchant sector, in particular, was slowing – possibly because they were destocking. The RMI market had slowed, possibly reflecting people tightening their belts, but all products, including MDF, related to new build were in demand. “MDF mouldings sales are still above the levels of 2018 and 2019,” TTJ was told. The faced MDF market was also reported to be holding up as furniture producers had good order books. Laminate flooring, which benefited from lockdown expenditure with a 25-30% growth in sales volumes, was still growing but at a much slower rate. As demand drops, prices would normally follow a similar trajectory but inflationary costs have kept prices pretty stable.
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