US panel demand stagnates

Jul 23, 2009. /Lesprom Network/. Demand for wood based panels in the US is declining faster than was earlier predicted, Wood Panels Online reported. US producers will increasingly need to focus on products tailored to higher-end use outlets, to help combat lower-cost net imports that will continue as an important source of supply to the US market and are expected to account for 33% of US demand by 2010. Continuing slowdowns in construction and business retrenchment suggest a bigger decline in demand for wood based panels than was earlier forecast by Freedonia. However the continuing flat economy will most likely further reduce the earlier forecast. Two years ago the company forecast a decline at around 1%/year through 2010, to 62 billion sq ft on a 3/8-inch basis being equal to $16bn. Hardwood plywood and MDF will continue to enjoy the best of the demand opportunities through 2010 at the expense of PB. Construction applications (furniture and engineered wood products) represent the major use for wood panels. General manufacturing applications that are focused on transportation equipment and material handling applications were thought to be in the running to provide a potential increase in demand for panels of 0.5% per year through 2010 amounting to roughly 21 billion sq ft. But manufacturing markets, will lead any gains, helping to offset weakness in demand for wood panels. Further declines in wood panel demand volume will limit unit price increases for basic grade wood panel products. But a shift in the value-added ‘speciality’ product mix will help some producers by improving quality and reducing costs. Such a trend will help to limit competition from alternative, non-wood materials, where technology is moving ahead faster.