Decorative Veneers market is severely hit due to shortage of imported ply and lack of hardwood ply in India. The shortage is growing steadily from last 4 months but it is panicking decorative plywood manufacturers in January-February months.
Indian Decorative Veneer producers has been using imported base plywood of less than 3.0 mm thickness from Malaysia and Indonesia but these countries are now dispatching large quantities to US and Japan. US imposed restriction on import from China and on uncertified plywood has added to supply diversion to US now.
On the same time Japanese companies are paying more for imported tropical plywood product from Malaysia and Indonesia due to strong demand and falling inventories with plywood manufacturers there. The reports coming from Malaysia say that ‘log supply shortage in these countries is the main reason for shortage added by high demand from US as well as Japan’. The average dispatch in shipments uses to be around 2-3 months before which is now uncertain at about even six-month plus time slot.
Plywood factories in Malaysia and Indonesia operate with small log inventories compared to their production capacity and at present quality logs are not available hence any improvement in scenario can be expected only after rainy season gets over by November 2018. Reduced supply volume and higher export prices will continue.
Thin plywood production is mainly dependent on log quality but the mills in Malaysia and Indonesia are not able to have enough quality logs hence prices are set to go up and up in coming months. The Indonesian 2.4mm thin plywood are being booked at around 850 $ per cbm and the similar in Malaysia said an agent based in Singapore.
In India, Decorative Veneer producers are running out of base ply stock where as the new material is in tremendous shortage making 2.8 mm and 2.4 mm prices higher by around 150 US dollar per cbm. The other alternate left for Indian producers is bringing base ply from China, but the doubts over quality of Chinese Plywood does not match with Indian decorative veneer manufacturers requirement.
Decorative veneer producers are very much hesitant of using inferior quality base ply although some producers are beginning to try using thin plywood made in India and that is the only way forward or the use of thin MDF as base plywood. The future is certainly hinting on finding new alternates.