Every month, MDF imports are rising, and the trend had continued for the last six months. The sources indicate that the imports will increase more in the near future. With the rising trend, the domestic players seem to be on the back foot with pressure on margins. As it has been attacked by imports and their business and profitability has been badly affected. Now they are finding safeguards and looking for the imposition of ADD on imports of MDF.
The industry had also witnessed a price correction in their product offerings, especially in coastal regions and southern parts of the country. Although, it has not affected the North Indian market till writing this news. The expectation is that if the price of timber continues to rise, the northern region will also be badly affected by imports. In the coming time, the North Indian market is likely to get affected as the timber price is continuously rising and is expected to reach Rs 7.5 per kg from the current price of Rs 6 per kg.
The incoming imports are denting the thin segment very hard that has led to over all margins and profitability of MDF players drop significantly. The quarter three results of organized MDF brands indicates the scenario with pressure on their margins. If we look at the impact, the last quarter's results of the leading suppliers clearly indicates that the market is getting crowded in plain mdf segment specially in western and southern regions.
Domestic MDF manufacturers are seeking the government to impose anti-dumping duties (ADD) on imported MDF. Domestic MDF manufacturers are of view that imported MDF's density is also formed on lower than marketed side to keep importers margin. In HD+MR grade too, lower quality boards are being brought. The materials are coming at a cheaper rate, which is affecting the domestic industry. They are also having discussions and looking for ways and processes to impose ADD on imports, as per industries report.
The industry players believe that to safeguard the industry, the imposition of ADD is a must. On the other hand, the furniture manufacturers who are using MDF have a different perspective. They said that they are getting material at a genuine rate that is supporting the "Make in India initiative, so they wish the ADD should not be imposed.