22 | Sector Market Update: Chipboard
CHIPBOARD MARKET HEATS UP AS DEMAND ACCELERATES
A sudden surge in demand for chipboard means the sector is chasing product rather than orders. Keren Fallwell reports
SUMMARY
■ Chipboard is in demand around the world
■ Sales are fuelled by consumer demand for interiors
■ Commodity grades are in short supply as producers focus on MFC and decorative boards
■ Prices have risen dramatically, reflecting tight supply and producers’ increasing costs
It’s rare that you hear a panel product being compared to gold dust but that describes the current availability of chipboard in the UK, and globally.
Demand has exploded at an unexpected rate and along the supply chain companies are constantly fielding enquiries from customers looking for product. And those calls are likely to continue as the sector believes there will be little change until the second half of this year – at least. Several distributors described the situation as “terrible”.
Below: The demand explosion is largely a result of increased sales of kitchens and bathrooms PHOTO: EGGER
“Last year we were chasing ambulances for orders and now we can’t get any product,” said one. “You can’t get any flooring grade or P2. MFC is the only product you can get. Demand is phenomenal worldwide.”
Another told TTJ plain chipboard supply had been “non-existent” since Q3 last year. “We’ve moved away from the product until supply comes back to something like normal,” he said.
During the first lockdown last year, panel mills stopped or curtailed production and, apart from demand from Nightingale hospitals and coffin makers, order books were pretty much empty. Chipboard producers were left wondering where they would get business to warrant running their plants. In post-lockdown June/July, however, the market came back stronger and more quickly than expected and that has only accelerated since Q3. Now chipboard manufacturers are working at full production and still leaving customers hungry for more product. It is impossible to know what the true demand is because it is not able to be satisfied. “If this is the worst lockdown we have then the future can only be bright because we are doing well,” said a producer. Earlier last year, customers of one UK manufacturer estimated that by Q4 2020 they might be back to 80% of normal business. By the time Q4 arrived, however, some of those customers were running at 130-140%. The surge was so sudden that one mill closed its orders for around six weeks and lead times lengthened.
The driving force behind this demand explosion is largely increased sales of kitchens and bathrooms. People working from home more, and without the opportunity to go on holiday, have more time to look critically at their properties. After investing in decking and fencing during the summer and autumn, and perhaps motivated by the exposure of their homes on Zoom calls, they have now turned attention to their interiors. As a result, mills are favouring production of MFC and decorative boards, making commodity items, such as P2 and P5, in short supply.
“Everyone wants to sell value-added products so a lot of manufacturers aren’t
TTJ | March/April 2021 |
www.ttjonline.com
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73
