De­mand for qual­ity wood-based pan­els and lam­i­nates grow­ing

Australasian Timber - - NEWS -

Fol­low­ing the 2008 global fi­nan­cial cri­sis, re­cent years have brought no­tice­able changes to Aus­tralia’s econ­omy and de­mog­ra­phy, with im­pli­ca­tions for the forestry sec­tor. For in­stance, con­stant pop­u­la­tion growth has sig­nif­i­cantly al­tered de­mand for wood prod­ucts, through a lift in hous­ing ac­tiv­ity, es­pe­cially af­ter years in which new hous­ing de­mand was not met by sup­ply. De­spite these con­di­tions, hous­ing com­mence­ments showed cycli­cal volatil­ity over time. This had a di­rect im­pact on de­mand for struc­tural wood prod­ucts and wood based pan­els.

Per capita con­sump­tion of rel­e­vant wood-based panel prod­ucts al­most quadru­pled be­tween the 1970s and early 2000s (from ap­prox­i­mately 0.03 m3/per­son to 0.11 m3/per­son). How­ever since 2003 it has de­clined to ap­prox­i­mately 0.09 – 0.08 m3/per­son and it has not ex­hib­ited very sig­nif­i­cant growth (1% growth be­tween 2014-15), as the chart be­low shows.

Aus­tralian Wood-based Panel Pro­duc­tion and Con­sump­tion: 2008- 2014 (km3) Im­ports and Ex­ports of Wood-based Pan­els into Aus­tralia: 2005 - 2015 (km3)

Most of Aus­tralia’s Par­ti­cle­board pro­duc­tion is used do­mes­ti­cally, with im­ported vol­umes show­ing a slightly in­creas­ing trend be­cause of the rel­a­tively high price of the prod­uct on the Aus­tralian mar­ket and favourable ex­change rate. Sig­nif­i­cantly, Aus­tralia be­came a net im­porter of Medium Den­sity Fi­bre­board (MDF), while years ago it was a net ex­porter.

Aus­tralia’s wood-based pan­els pro­duc­tion is partly linked with the New Zealand in­dus­try, not only due to its sim­i­lar­i­ties, such as raw ma­te­rial (wood species and qual­ity) and ge­o­graphic lo­ca­tion, but also due to their pro­duc­tion ca­pac­i­ties and com­mon own­er­ship such as that by the Fletcher Build­ing Group and Rank Group. These two cor­po­ra­tions own more than 60% of the Aus­tralian do­mes­tic Par­ti­cle­board and MDF pro­duc­tion ca­pac­ity through Laminex and Carter Holt Har­vey. A rel­a­tive small num­ber of play­ers pro­vides the rest of the lo­cal pro­duc­tion ca­pac­ity.

Fig­ure 9: Aus­tralian Par­ti­cle­board and MDF pro­duc­ers

Source: Sciencetech Con­sult­ing

In Aus­tralia, the wood-based pan­els sec­tor is well-es­tab­lished and ben­e­fits from a rel­a­tively high level of in­te­gra­tion of the Par­ti­cle­board and MDF man­u­fac­tur­ing with the pro­duc­tion of lam­i­nate floor­ing, pan­els lam­i­na­tion and im­preg­na­tion, doors and work­tops.

The ma­jor­ity of de­mand for wood-based pan­els and as­so­ci­ated added value prod­ucts is driven by the fur­ni­ture and con­struc­tion sec­tors. Fur­ni­ture, floor­ing, doors and kitchen units and bench­tops con­sti­tute ap­prox­i­mately half of the de­mand, with the re­main­ing pro­por­tion re­lated di­rectly to the con­struc­tion sec­tor.

Sus­tained growth in build­ing ap­provals, in­clud­ing not only units and apart­ments but also com­mer­cial build­ings such as aged care, health, en­ter­tain­ment, recre­ation and short-term ac­com­mo­da­tion build­ings, is pro­vid­ing vig­or­ous prospects for the Aus­tralian wood-based pan­els man­u­fac­tur­ing in­dus­try and im­porters as the chart be­low – re­lated to aged and health­care – demon­strates.

Num­ber of Aged/Health Care Build­ings by Value: 2006-2014

As a re­sult, de­mand for kitchens and bath­room fur­nish­ing is in­creas­ing. Also, large de­vel­op­ments such as ho­tels and casi­nos com­plexes are es­ca­lat­ing the con­sump­tion of high qual­ity wood based pan­els, dec­o­ra­tive prod­ucts and lam­i­nates.

At the same time, ad­vanced, in­no­va­tive pa­per based sur­faces are gain­ing mar­ket ac­cep­tance, while MDF sur­faced with wood ve­neer pan­els achieve re­turns at the higher end mar­ket.

It should be noted that the ren­o­va­tions seg­ment also has a sig­nif­i­cant mar­ket share as a user of kitchen and bath­room fit­tings, yet the sec­tor is un­der­es­ti­mated due to the lack of con­sis­tent sta­tis­ti­cal data. Cabi­net-mak­ers are sur­rounded by pos­i­tive data and are seek­ing to max­imise their ca­pac­i­ties to ful­fil what is cur­rently strong de­mand.

Thus, we can ex­pect that there are com­mer­cial op­por­tu­ni­ties for both lo­cal pro­duc­ers and im­porters of high-qual­ity wood panel prod­ucts in the short to medium term. As the ca­pac­ity of lo­cal pro­duc­tion closes in on its peaks, lo­cal im­porters may be the ben­e­fi­cia­ries, as long as they meet mar­ket ex­pec­ta­tions for prod­ucts that demon­strate en­vi­ron­men­tal cre­den­tials and com­pli­ance with Aus­tralian safety and tech­ni­cal stan­dards.

This fea­ture rep­re­sents a con­tin­u­a­tion of In­dus­tryEdge’s en­deav­our to pro­vide up-to-date in­sights into the mar­kets of value added wood prod­ucts. These edi­to­ri­als are the re­sult of our col­lab­o­ra­tion with Dr Mi­hai Da­ian of ScienceTech Con­sult­ing.

Reprinted by agree­ment with In­dus­tryEdge, the pub­lisher of the monthly, sub­scrip­tion only Wood Mar­ket Edge and Pulp & Pa­per Edge. Go to www.in­dus­tryedge.com.au for fur­ther up­dates and com­pli­men­tary re­sources.

Source: ABARES

Source: ABARES

Source: ABARES

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