Few companies break away from the rest by investing

The knock-on effects of the Covid-19 pandemic severely influenced the wood-based panel and surfaces industry in 2021, as well. A plunge caused by the first lockdown in the second quarter of 2020 gave way to an unexpectedly strong recovery in demand over the next few months; this trend has continued to play out this year, too. The situation continued to improve in a variety of segments during the first half. Many companies had scaled back production and reduced their inventories after the outbreak of the pandemic. The subsequent recovery, combined with shifts in global supply flows, culminated in a structural shortage of material on markets. Supply was limited in the wake of the aforementioned destocking and no longer sufficient to meet demand that was still growing.

Many companies have reacted to this shortage by purchasing extra amounts to ensure their supply of upstream products. Lead times have increased more and more as a result. From spring onwards, the market encountered supply constraints that endured into the third quarter. Production plans had to be adjusted and production cutbacks or shutdowns could not always be avoided. The combination of these factors paved the way for an unusually large increase in prices for almost all products during 2021. At the same time, though, sourcing upstream products has become increasingly critical; businesses had a really hard time sourcing all upstream products used to make resin, glue/impregnating resin, PMDI glue, melamine film and, in the second half of the year, decor paper and printing decors. These escalating costs for upstream products have at least partially nibbled away at better margins achieved by raising prices.
The complete overview summarising corporate changes in the wood-based panel and surfaces sector is available in the printed version of issue 1-2/2022 or as pdf.

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