On Monday March 7th Channel 4 News broadcast an item entitled, “Timber prices up as power plants boost biomass use”. This five minute report highlights the dilemma faced by manufacturers of timber based panel products. You can view the item here
Biomass is presently the biggest influence on price and for the foreseeable future all wood based panel products including Medium Density Fibreboard (MDF) will have both availability and price pressures.
All of the UK producers have been forced to apply several price increases between the start of 2011 and today, which cumulatively amounts to 20-30%, and without doubt more will follow on at least a quarterly basis.
Volume constraints are already a very significant and worrying feature, and the importance of secure supply chains should not be underestimated.
In the past two years European MDF capacity has been reduced by 650,000 cubic metres as biomass competed for raw material. This is not a short-term problem, and with Government not due to review its subsidy policy until 2013 secure supply will be an increasingly important factor.
Fibercill will continue to take a strategic approach to the supply chain that is forward looking, ensuring that it best supports all of its customers and suppliers for the future. Taking clear steps to ensure the sustainability of the supply chain is central to our strategy and improving collaboration key to strengthening it for the more welcome challenges that lie ahead when growth finally comes.