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WhatWood Furniture Demand for furniture boards exceeded the supply in October

Demand for furniture boards exceeded the supply in October

18 December 2023 ` 20:26  

In October 2023, a regular high furniture season came, which coincided with the relatively high demand for furniture boards that had persevered throughout the summer. However, if the demand matched the supply of boards in summer, now the market can be called imbalanced. The demand is increasingly reported to exceed the supply. This is currently true in the particleboard and MDF segments of furniture boards.

Producers raise their shipping prices following the demand. In October, the greatest growth (+10–15% MoM) was recorded in the laminated particleboard segment.

Another driver behind the rising prices is the monthly growth of logistics costs. The market allows producers in the furniture boards segment to raise their shipping prices, but other board producers have to shoulder the growing costs, thus reducing their marginal profit.

The increasing cost is additionally driven by the growing cost of labor, logs, and chemical components, by the ruble exchange rate, and so on. According to news published by mass media in October, the railway tariffs would also rise starting from December 1, 2023. The Federal Anti-Monopoly Service of the Russian Federation prepared the corresponding proposals, whereupon the document was posted on the federal web portal for draft bills and regulations. In late September, a forecast by the Ministry of Economic Development for 2024–2026 said that railway tariffs on cargo transportation may escalate by 10.75% starting from December 1, 2023.

Despite the growing costs, the index of average producers’ plywood and OSB prices remained unchanged in October, according to WhatWood estimates.

Read more in Russian Timber Journal 09-2023.

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