As the year has progressed, the European plywood sector has become increasingly depressed. That’s the consensus among a number of leading importers and distributors. In the words of one company, the market faced a ‘perfect storm of negative factors’.
There has been a steady draining away of end-user and consumer confidence, buying, as a result, has become increasingly piecemeal, with forward ordering evaporating and prices have fallen across the board, in the case of certain products up to 40%.
Many European buyers are heavily stocked and bad debt is reported on the rise. Reflecting dwindling demand, supply is plentiful and orders available on relatively short lead times.
However, with manufacturers now trimming output in the face of deteriorating market conditions and plant closures and production line mothballing anticipated, importer nervousness about prepaying for orders has increased.
“We expected some market adjustment after having a robust three years of business from 2016 to 2018, with global plywood output hitting a record 161 million cu.m in 2017 and Chinese production reaching 117 million cu.m,” said one continental European importer. “But we didn’t think it would be as difficult as this.