MDF industry is able to absorb the rising timber cost that has battered the entire wood panel industry and trade since a couple of months. MDF panels demand is strong led by value category of HD+MR grade material where earning cushion has been comparatively better. The peelable timber cost has jumped by 30% in last 2 months where as fibre grade timber prices have been marginally up. That is the reason why MDF manufacturers are still able to absorb the price rise.
Ply Reporter market feed, reveal that waiting period of MDF orders have been reduced to 10 days which has been above 30 days since a year. It is also because, the supply of MDF has improved during last two months after beginning of production at two more lines and also due to more new manufacturing lines having started production and many have increased its production capacity utilization.
As per report, Green Panel Industries has increased its production capacity in Andhra Pradesh and Uttarakhand based MDF units with adding new equipment to the line. Action Tesa has also increased its output. Rushil Décor is also improving its capacity utilization of Andhra Pradesh manufacturing units during previous months. In Northern India, Crosta Panels has started production of its thin MDF in Yamunanagar, besides Adlerwud and Trenox Laminates are also ramping up and modernising their plant set up to increase the output and prelam boards.
The year-end closing at various MDF plants reflects a sharp growth in revenues and profitability, thus companies are taking a ‘wait and watch’ mode for any further price increase, until it becomes unbearable. It is equally true that India is adding up more capacity in MDF that will be out in 2023, thus from here on, prices are expected to be stable side. The capacity addition at CenturyPly inHoshiarpur Punjab based unit with a new line of approximately 400 cubic meters, which will start commercial production in coming months.
What is evident is prices in MDF will be stable in short term with easing up chemical prices. Let us see how much of energy cost and timber cost impact the input cost and profitability in coming months. Since everyone is putting efforts in utilizing their maximum possible capacity to meet the current demand, stability in supply is also certain.