Recently the sudden drop in interior grade MDF prices through schemes offered by various brands and companies has perturbed the stakeholders. The MDF market which was slowly stabilizing has got a mixed reaction. The key distributors who are holding a large quantity of MDF are definitely very puzzled by the downfall in prices of interior grade MDF. Though the demand was picking up, apprehensions prevail as to what will happen next. The wholesale market is still contemplating the effect of price correction in the interior grade MDF category.
The brands, which were offering 3 to 6% less pricing than top brands are now under pressure to reassess their pricing. Ply Reporter estimates that the next 15 to 20 days can be a little volatile for interior grade MDF and the demand might be impacted.
Primary demand can be impacted in the High Density Moisture Grade category as well, although there has been no correction in this grade MDF. Meantime, this move has definitely put those companies under pressure who are producing ‘Haraboard’ and inferior grade MDF because when the market receives reliable quality at a reasonable price, the pressure will certainly be passed on to the lower bracket products. It will be interesting to see how the MDF market behaves.
One thing is very sure that this reassessment in MDF pricing will further squeeze the margin of MDF producers across various categories and regions. It will also create a hurdle for imported MDF as it has been anticipated that a couple of brands, after having acquired BIS certification will have easy access but this 5% means a lot to them. So in a way, the market, the wholesale market may be witnessing pressure. But in the next two to three months, once again, Indian brands have put a break on possible imports or re-entry of imported brands, Pan India.
With a squeeze on margins and demand, it can be inferred that the Indian market will see a growth in panel product demand with a bright spot in global uncertainty. India holds a bright spot market amidst global uncertainty.