Excess Capacity Will Benefit PB & MDF Buyers, Study Says.NORTH AMERICAN North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. industrial panel prices and operating rates should remain low for the next few years due to an excess capacity in both MDF (1) (Main Distribution Frame) A wiring rack that connects outside lines with internal lines. It is used to connect public or private lines coming into the building to internal networks. and particleboard par·ti·cle·board or particle board n. A structural material made of wood fragments, such as chips or shavings, that are mechanically pressed into sheet form and bonded together with resin. , according to a new study released by R.E. Taylor & Assoc. of Vancouver, BC. "All of the factors analyzed predicate that a 'weak' U.S. market environment will exist for both particleboard and MDF in terms of prices -- the supply and demand balance are not expected to support any further increases in prices," the study says. "Supply side dynamics are expected to maintain particleboard and MDF prices within a narrow trading range Trading Range The spread between the high and low prices traded during a period of time. Notes: When a stock breaks through or falls below its trading range after several days of trading in a range, it usually means there is momentum (positive or negative) building. over the forecast period -- or similar to the price ranges that occurred between 1997 and 1998. Due to increased market activity, spot prices are expected to peak late in 1999 or early 2000 before moving slightly lower. As long as new capacity continues to be installed at levels well in excess of demand, soft price levels and low mill operating rates will be consequences. "However, MDF could finally improve its operating rates (industry production vs. capacity) since little new capacity is being planned in North America," the study says. "While particleboard has benefited from higher operating rates in the late 1990s, new planned capacity for 2000 to 2002 could create oversupply in the North American market if all of the announced plants are built." The development of panels made with urban wood waste and agricultural fibers is seen as a "wildcard See wild cards and wildcard mask. that influences our forecast. Using agricultural fibers (wheat, bagasse bagasse Fibre remaining after the extraction of the sugar-bearing juice from sugarcane. The term was once applied more generally to various waste residues from processing plant materials. , fescue fescue (fĕs`ky  ), any of some 100 species of introduced Old World grasses of the genus Festuca. , soy)
instead of wood as the raw material, (offers) a high-quality/low-cost
alternative to particleboard and even competes effectively with some of
the lower grades of MDF. As a result, up to a dozen new plants of
varying sizes could create a surge in new capacity that would create a
detrimental effect on existing particleboard and MDF production rates
and prices."
The predictions of particleboard and MDF are contained in "Wood Markets 2000 -- The Solid Wood Products Outlook -- 2000 to 2004." The 400-page report also covers the North American markets for softwood lumber, plywood/OSB, and timber supply. |
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