Global MDF Market - Key Findings by IndexBox
Global MDF Market - Key Findings by IndexBox
Global MDF Market: The U.S. Remains the Largest Market for Imports
MDF Consumption Has Increased Steadily
According to the report "World - MDF - Market Analysis, Forecast, Size, Trends and Insights", recently published by IndexBox, the global MDF market amounted to 99.6M cubic meters in 2017, posting solid gains over the last ten years. Market volume expanded by an average annual rate +5.6% over the period from 2007 to 2017. In the past few years, consumption growth decelerated after the strong 2010-2014 growth, caused by world GDP decrease due to oil price drop and a set of structural changes in Chinese economy.
In value terms, the market stood at $35.7B, which was approx. at the level of 2016. The market recorded a robust upward trend from 2010 to 2014, until it turned downward, falling over the next three years on the backdrop of a decline of global MDF prices.
China Accounts for More Than a Half of Global MDF Consumption
China (56.8M cubic meters) was the country with the highest volume of consumption in the world, solely accounting for approx. 57% of global consumption. The other countries lagged far behind: the U.S. (4.6M cubic meters), Turkey (4.1M cubic meters), Brazil (3.4M cubic meters), Poland (3.4M cubic meters), Russia (2.3M cubic meters), Iran (2.2M cubic meters) and South Korea (1.9M cubic meters); all these countries, together with China, comprised near 79% of global consumption.
The highest average annual growth rates of MDF consumption from 2007 to 2017 were recorded in Iran, with +14.5%, China, with +9.1% growth, Turkey, with + 8.7% and Poland, with +7.8% (IndexBox estimates).
Among the leading consuming countries, high level of per capita consumption levels were recorded in Poland (88.0 cubic meters per 1,000 in 2017), which was significantly higher than the world average of 13.1 cubic meters per 1,000. In this country, per capita consumption grew with a CAGR of +7.9% in 2007-2017. However the most notable growth of per capita consumption from 2007 to 2017 was recorded in Iran, with on average +12.9% per year. Brazil (16.0 cubic meters per 1,000) and the U.S. (14.0 cubic meters per 1,000) had the lowest volumes of MDF consumption.
The MDF Consumption is to Continue Moderate Growth Amid Rising Construction and Furniture Manufacturing
MDF consumption is dependent on economic condition, the production of construction materials and furniture, which, in turn, are directly related with the construction sector. Pacific Rim is a region with the largest MDF market, which is likely to be the main beneficiary of the expansion in MDF production China alone occupied about 57% of the global market.
Chinese construction market is expected to witness a strong growth rate in the medium to long term future. This would be supported by the still growing economy, expanding urbanization and large building industry investments. As such, the largest gain is expected to come from infrastructure building, an ongoing urbanization would keep creating large super cities. China already has 15 megacities and expects several more urban centers to reach megacity status in the next few years.
The second largest MDF market by size is the United States. An increase in demand in the recovering building and furniture manufacturing sectors in North America will be a key driver for growth in the production of MDF. The construction industry in the U.S. also keeps showing growth, which is reinforced by the availability of loans. Strong employment also is a significant factor as it does directly affect consumer spending. In the medium term, amid the current economic recovery, this is expected to be the main driver of growth, promoting spending for furniture, residential housing, and non-residential construction. A growth in disposable income levels and a recovering housing market are expected to increase sales of upstream products, such as MDF.
With the building industry expanding and, as a result, increasing furniture demand in the top MDF consuming countries, the global market volume is expected to strengthen in the following 12 years. The performance of the market is forecast to grow with an anticipated CAGR of +2.3% for the period from 2018 to 2030, which is expected to lead the market volume to 134M cubic meters by 2030.
The Most Promising MDF Suppliers are Poland, Russia, Brazil and Thailand
China, Turkey, Brazil, Poland, Russia, Thailand and Belarus are the biggest MDF producers in the world in value terms. All of these countries are intensifying production, mostly visible in Belarus (+31.5%), Russia (+9.9%), Turkey (+9.3%) and China (+9.0%).
The largest producers have also been expanding their presence at the global exports market. The highest export growth pace was in Belarus (+70.8%), Brazil (+31.0% per year), Russia (+19.4% per year), Thailand (+11.5%).
The following countries have had relatively low and decreasing prices over the 10 years: Poland ($295 per cubic meter), Russia ($278 per cubic meter), Brazil ($211 per cubic meter) and Belarus ($96 per cubic meter); Thailand ($212 per cubic meter) has had a less rapid price drop. At the same time, export prices to China and Turkey were relatively high, thereby making those countries to be a less attractive option to purchase MDF. Therefore, Poland, Russia, Brazil and Thailand are the most promising suppliers of MDF.
Most Promising Overseas Markets are the U.S., Canada and Japan
China, Turkey, Brazil, Poland, Russia and Iran are the largest growing MDF consumers. In Poland (88 cubic meters per 1000 persons), Turkey (51 cubic meters per 1000 persons) and China (39 cubic meters per 1000 persons) per capita consumption is large and growing, while in Brazil and Russia (16 cubic meters per 1000 persons each) it is comparatively low.
Most of the above mentioned countries are saturated by domestic supply only. Meanwhile the U.S., Iran, Saudi Arabia, Canada and Viet Nam are among large and growing importers. The UK, Italy, France and Japan also feature large imports, but it does not currently post any tangible growth.
The U.S., Canada and Japan are considered the most profitable countries due to high import prices, while Poland, Iran and Viet Nam – the least profitable, as the prices there are relatively low and decreasing. Thus, the U.S., Canada and Japan are the most promising overseas markets for MDF.
The Growth of MDF Production Decelerated
Production of MDF reached 101.5M cubic meters in 2017; a relatively flat trend from 2007-2009 was followed by a steady growth through to 2017, which, however, decelerated over the last three years, hampered by a slowdown in the growth of demand. In value terms, global production of MDF was estimated at $36.4B in 2017, which approx. at the level of the previous year. The value of production upturned from 2010 to 2014, with a further decline over the following two years; in 2017, the value of production stabilized
China, as Well as Turkey, Brazil and Poland Intensively Increased MDF Output
China was the key world MDF producing country with an output of about 59.0M cubic meters in 2017, which accounted for 58% of the global output. The other major producers were Turkey (5%), Brazil (4%) and Poland (4%), the U.S. (3%), Russia (3%), Thailand (2%), South Korea (2%), Belarus (2%) and Spain (2%).
In China, the production volume increased by +9.0% annually from 2007 to 2017, largely attributed to favorable economic conditions and growth of downstream industries (furniture production and, at a broader extent, residential and non-residential construction). The other leaders also experienced high paces of production growth: Turkey (+9.3% per year), Brazil (+7.9% per year), Poland (+8.1% per year).
About 18% of Global Production of MDF is Exported
MDF remains a widely traded commodity, despite the decline of the share of export in total global output from 24% in 2007 to 18% in 2017. High trade intensity is determined mainly by the substantial distances between the main centers of MDF manufacturing and key consuming countries.
China, Thailand and Germany Increased Their Exports
In 2017, the volume of global MDF exports totaled 18.2M cubic meters, which was 2% more than the year before. A noticeable decline was observed with regard to the volume of exports in 2008-2009, followed by a recovery over the next two years; afterwards, it flattened over 2012-2013, and then started to grow moderately through to 2017.
China (2.5M cubic meters), Thailand (1.8 cubic meters) and Germany (1.2M cubic meters) were the main global suppliers of MDF, with a combined share of 30% of global exports. They were followed by Belgium, Russia and Belarus, each accounting for about 5% of global exports. From 2007 to 2017, Belarus (+70.8% per year) was the fastest growing supplier among the major exporters. It was followed by Russia (+19.4%) and Thailand (+11.5%). Despite being one of the largest global producers of MDF, the U.S. and South Korea did not export much of their production, meaning that it was either domestically consumed, or put in storage.
While the share of Thailand (+6 percentage points), Belarus (+5 percentage points), Russia (+4 percentage points) and China (+3 percentage points) increased, the share the other countries remained relatively stable throughout the analyzed period.
The U.S. and Iran Were the Largest Importers of MDF
The volume of global imports totaled 16.3M cubic meters in 2017. The trend pattern of imports practically mirrored that of exports: these trade flows globally complement each other.
In 2017, the U.S. (1.7M cubic meters) and Iran (1.3M cubic meters) were the leading destinations of MDF imports, together making up 18% of global imports. They were followed by the UK (5%), Saudi Arabia (4%), Italy (4%) and Canada (4%). Among the major importing countries, Iran (+10.3% per year) gained the highest annual growth rates from 2007 to 2017. With regard to the share of a particular country in global imports, the shares of Iran (+5 percentage points), the U.S. (+3 percentage points) and Canada (+2 percentage points), increased from 2007 to 2017, while the share of Italy (-2 percentage points) illustrated negative dynamics. The shares of the other countries remained relatively stable throughout the analyzed period.
Source: Index Box
