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Rapid Recovery of the Furniture Industry Restores the Turkish MDF Market from the Pandemic

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Rapid Recovery of the Furniture Industry Restores the Turkish MDF Market from the Pandemic

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IndexBox has just published a new report: Turkey – MDF – Market Analysis, Forecast, Size, Trends And Insights’. Here is a summary of the report’s key findings.

Following the easing of the quarantine measures in Turkey, the demand for MDF from the furniture and construction industries increased tangibly, recovering from a sharp drop recorded over April – May 2020.

After working remotely during the lockdown, people began to pay more attention to their homes and shop more for furniture and building materials. This led to a revival of the construction and furniture markets. If the country will return to pandemic-free life in 2021, Turkey’s real GDP is projected to grow by about 3% per annum in the medium term.

The furniture and construction industries, as the main consumers of MDF, have been hit by the COVID crisis. Restrictive measures during the pandemic led to many enterprises were put on hold, construction projects paused, and sales of furniture were hampered for several months. There was a drop in GDP of approx. -0.5% against 2019, which worsened the slowdown in the Turkish GDP growth recorded over the last three years. The second quarter of 2020 was also marked by a sharp drop in Turkish investment in fixed assets. Against this background, MDF production volumes bottomed out against the last year in April 2020.

The overall recovery of the economy began in the third quarter of 2020. The volumes of investment in fixed assets from this period started to increase, in the fourth quarter of 2020 they exceeded the corresponding indicators of 2019. The recovery of the GDP growth and investments shapes the revival of the wood-based materials market. In May 2020, the MDF production began to grow rapidly and exceeded its pre-crisis level in July 2020.

As the MDF market is predominantly a b2b-market, no dramatic changes are expected in the sales channels. However, online communication becomes increasingly important even in the b2b sales channels, with the use of distant negotiations and electronic document workflow. According to official statistics, MDF production indices rebounded in May 2020, which is a sign of MDF producers adapted their supply chains and sales channels to the “new normality”.

The decrease in furniture production in April 2020 against the increased demand for those products, led to a rise in furniture prices. With the recovery started in the second half of 2020, the growing demand shaped a prolonged increase in prices for wood-based materials, which reflected rising producer prices for furniture. If prices continue rising, it could hamper the demand for furniture as incomes are not expected to grow at that tangible pace. Should this happen, it may put a drag on the growth of the MDF market in the medium term.

Domestic Manufacturing Continues to Force Imports Out of the Market

The volume of MDF imports has reached its peak of approx. 3.5K cubic meters in March 2020 and amounted to $3.5M. Afterward, the MDF imports in Turkey experienced a sharp contraction since the outbreak of the pandemic in April 2020 due to the lockdown. In a broader context, this decrease continued a long-term contraction of imports which had been gradually displaced by domestic manufacturing. Over the whole of 2019, approx. 4.8M cubic meters of MDF were produced in Turkey, while purchases abroad decreased by -64.6% to only 20K cubic meters, falling for the seventh year in a row.

Affected by an intensive growth in domestic production, which will gradually displace imported products from the market, the share of imports decreased from 11% in 2007 to 0.5% in 2019 (IndexBox estimates). Turkey’s domestic supply is expected to continue its growth, thereby making the country a less attractive destination for suppliers from abroad. However, the potential for import substitution has been practically exhausted, forcing Turkish producers to look for new growth opportunities.

Furniture Boom in Western Countries May Become a New Driver for the Industry

The pandemic and the related isolation and remote working drive an increase in demand for furniture not only in Turkey but also in other countries. The U.S., for example, experiences a boom of suburban construction and relocation to country houses, which entails an increase in demand for furniture. This trend might be interesting for Turkish manufacturers with regard to searching for the most promising markets to boost exports.

In 2019, the amount of MDF exported from Turkey skyrocketed to 826K cubic meters, growing by 32% on the previous year’s figure. Overall, exports enjoyed a strong expansion, fuelled by rising domestic output. In value terms, it amounted to $283M.

Traditionally, the export of MDF from Turkey falls on the countries of the Middle East region. The largest markets for MDF exported from Turkey were Iraq ($57M), Iran ($32M), and Tunisia ($24M), with a combined 40% share of total exports. Increasing exports to countries with rising demand for MDF, e.g., the U.S., where the furniture and construction industries post solid gains over 2020-2021, can be an ambitious goal for Turkish manufacturers. Should this happen, it may become a new driver for the Turkish MDF industry.

Source: IndexBox AI Platform

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Hampered by the Pandemic, the Global MDF Market to Pursue Only Measured Growth

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IndexBox has just published a new report: ‘World – MDF – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

The global MDF market declined slightly to $45.9B in 2019, which is down by -4.8% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). The market value increased at an average annual rate of +1.4% from 2013 to 2019; the trend pattern remained consistent, with only minor fluctuations being observed in certain years. The pace of growth appeared the most rapid in 2018 with an increase of 13% y-o-y. As a result, consumption reached the peak level of $48.2B and then fell modestly in the following year.

Consumption by Country

China (53M cubic meters) Fremains the largest MDF consuming country worldwide, accounting for 52% of total volume. Moreover, MDF consumption in China exceeded the figures recorded by the second-largest consumer, the U.S. (4.6M cubic meters), more than tenfold. The third position in this ranking was occupied by Turkey (4.4M cubic meters), with a 4.3% share.

In China, MDF consumption remained relatively stable over the period from 2013-2019. In the other countries, the average annual rates were as follows: the U.S. (+3.4% per year) and Turkey (+0.7% per year).

In value terms, China ($24.5B) led the market, alone. The second position in the ranking was occupied by the U.S. ($2.9B). It was followed by Turkey.

The countries with the highest levels of MDF per capita consumption in 2019 were Belarus (178 cubic meters per 1000 persons), Poland (89 cubic meters per 1000 persons) and Turkey (53 cubic meters per 1000 persons). Moreover, MDF per capita consumption in Belarus exceeded the figures recorded by the world’s second-largest consumer, Poland, twofold.

Market Forecast to 2030

Taking into account the vulnerability of the construction sector to the pandemic, as well as reduced investment and consumer spending, it is expected that in 2020, global consumption of MDF declined somewhat against 2019. in the medium term, as the global economy recovers from the effects of the pandemic, the market is expected to grow gradually, driven by rising population and recovering incomes. Overall, market performance is forecast to pursue a slightly upward trend over the next decade, expanding with an anticipated CAGR of +1.1% for the period from 2019 to 2030, which is projected to bring the market volume to 115M cubic meters (IndexBox estimates) by the end of 2030.

Production

In 2019, the amount of MDF produced worldwide reduced slightly to 102M cubic meters, leveling off at 2018 figures. The total output volume increased at an average annual rate of +2.3% from 2013 to 2019; the trend pattern remained consistent, with only minor fluctuations in certain years.

Production by Country

China (55M cubic meters) constituted the country with the largest volume of mdf production, accounting for 54% of total volume. Moreover, MDF production in China exceeded the figures recorded by the second-largest producer, Turkey (4.8M cubic meters), more than tenfold. Brazil (4.5M cubic meters) ranked third in terms of total production with a 4.4% share.

In China, MDF production remained relatively stable over the period from 2013-2019. In the other countries, the average annual rates were as follows: Turkey (+1.9% per year) and Brazil (+1.5% per year).

Imports

Global MDF imports dropped to 14M cubic meters in 2019, shrinking by -8.1% on the previous year. In general, imports, however, showed a relatively flat trend pattern. The most prominent rate of growth was recorded in 2018 with an increase of 8% year-to-year. As a result, imports attained the peak of 16M cubic meters and then shrank in the following year. In value terms, mdf imports dropped to $6.5B (IndexBox estimates) in 2019.

Imports by Country

In 2019, the U.S. (1.5M cubic meters), followed by the UK (581K cubic meters), Italy (573K cubic meters), Japan (524K cubic meters), the Netherlands (495K cubic meters), Poland (478K cubic meters), France (469K cubic meters), Germany (445K cubic meters), Saudi Arabia (406K cubic meters), the United Arab Emirates (378K cubic meters), Belgium (374K cubic meters), Uzbekistan (364K cubic meters) and Mexico (361K cubic meters) were the major importers of mdf, together comprising 49% of total imports.

Imports into the U.S. increased at an average annual rate of +5.3% from 2013 to 2019. At the same time, Poland (+24.6%), Uzbekistan (+19.9%), Belgium (+8.3%), the Netherlands (+3.9%), Germany (+2.8%) and the UK (+1.2%) displayed positive paces of growth. Moreover, Poland emerged as the fastest-growing importer imported in the world, with a CAGR of +24.6% from 2013-2019. Italy, Japan and the United Arab Emirates experienced a relatively flat trend pattern. By contrast, Mexico (-4.2%), France (-4.3%) and Saudi Arabia (-9.0%) illustrated a downward trend over the same period.

In value terms, the U.S. ($895M) constitutes the largest market for imported mdf worldwide, comprising 14% of global imports. The second position in the ranking was occupied by the UK ($341M), with a 5.3% share of global imports. It was followed by France, with a 4.6% share.

From 2013 to 2019, the average annual rate of growth in terms of value in the U.S. totaled +6.3%. In the other countries, the average annual rates were as follows: the UK (+3.1% per year) and France (-1.8% per year).

Import Prices by Country

The average MDF import price stood at $452 per cubic meter in 2019, remaining constant against the previous year. Overall, the import price showed a relatively flat trend pattern. The pace of growth was the most pronounced in 2017 an increase of 4.8% against the previous year. Over the period under review, average import prices hit record highs at $476 per cubic meter in 2014; however, from 2015 to 2019, import prices failed to regain the momentum.

There were significant differences in the average prices amongst the major importing countries. In 2019, the country with the highest price was France ($629 per cubic meter), while Uzbekistan ($242 per cubic meter) was amongst the lowest.

From 2013 to 2019, the most notable rate of growth in terms of prices was attained by France, while the other global leaders experienced more modest paces of growth.

Source: IndexBox AI Platform

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The EU MDF Market to Post Moderate But Steady Growth

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IndexBox has just published a new report: ‘EU – MDF – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

The revenue of the MDF market in the European Union amounted to $5.3B in 2018. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). The market value increased at an average annual rate of +5.5% over the period from 2013 to 2018; the trend pattern remained consistent, with only minor fluctuations in certain years. The pace of growth appeared the most rapid in 2018 when the market value increased by 12% y-o-y. In that year, the market attained its peak level and is likely to continue its growth in the immediate term.

Consumption by Country

Poland (3.3M cubic meters) constituted the country with the largest volume of MDF consumption, accounting for 28% of total volume. Moreover, MDF consumption in Poland exceeded the figures recorded by the second-largest consumer, Italy (1.3M cubic meters), threefold. The third position in this ranking was occupied by the UK (1.3M cubic meters), with a 11% share.

In Poland, MDF consumption expanded at an average annual rate of +6.6% over the period from 2013-2018. In the other countries, the average annual rates were as follows: Italy (+7.5% per year) and the UK (+2.7% per year).

In value terms, the largest MDF markets in the European Union were Poland ($1.3B), Italy ($713M) and the UK ($657M), together accounting for 50% of the total market. France, Spain, Germany, the Netherlands, Romania, Portugal, Austria, Sweden and Hungary lagged somewhat behind, together accounting for a further 39%.

In 2018, the highest levels of MDF per capita consumption was registered in Poland (87 cubic meters per 1000 persons), followed by Portugal (38 cubic meters per 1000 persons), Romania (29 cubic meters per 1000 persons) and Austria (28 cubic meters per 1000 persons), while the world average per capita consumption of MDF was estimated at 23 cubic meters per 1000 persons.

Market Forecast to 2030

Driven by increasing demand for MDF in the European Union, the market is expected to continue an upward consumption trend over the next decade. Market performance is forecast to decelerate, expanding with an anticipated CAGR of +2.4% for the period from 2018 to 2030, which is projected to bring the market volume to 16M cubic meters by the end of 2030.

Production in the EU

The volume of MDF production totaled 13M cubic meters in 2018, remaining constant against the previous year. The total output increased at an average annual rate of +2.7% from 2013 to 2018; the trend pattern remained relatively stable, with only minor fluctuations being recorded throughout the analyzed period. The pace of growth appeared the most rapid in 2015 with an increase of 8.4% y-o-y. The volume of MDF production peaked at 13M cubic meters in 2017, leveling off in the following year.

Production by Country

Poland (3.6M cubic meters) remains the largest MDF producing country in the European Union, accounting for 28% of total volume. Moreover, MDF production in Poland exceeded the figures recorded by the second-largest producer, Spain (1.5M cubic meters), twofold. The third position in this ranking was occupied by Germany (1.5M cubic meters), with a 11% share.

In Poland, MDF production expanded at an average annual rate of +4.8% over the period from 2013-2018. In Spain, the average annual rates stood at +6.3% per year, while in Germany, the volume of production practically mirrored its outset level of 2013.

Exports in the EU

In 2018, the amount of MDF exported in the European Union amounted to 6.5M cubic meters, remaining relatively unchanged against the previous year. Overall, MDF exports, however, continue to indicate a relatively flat trend pattern. The pace of growth appeared the most rapid in 2016 when exports increased by 3.3% y-o-y. In that year, MDF exports attained their peak of 6.7M cubic meters. From 2017 to 2018, the growth of mdf exports failed to regain its momentum. In value terms, MDF exports amounted to $3.3B (IndexBox estimates) in 2018.

Exports by Country

In 2018, Germany (1.5M cubic meters), distantly followed by Belgium (1,012K cubic meters), Poland (682K cubic meters), Spain (643K cubic meters), France (436K cubic meters), Austria (404K cubic meters) and Ireland (322K cubic meters) were the major exporters of MDF , together comprising 77% of total exports. Romania (261K cubic meters), Portugal (259K cubic meters), Italy (218K cubic meters), Hungary (185K cubic meters) and Slovenia (136K cubic meters) followed a long way behind the leaders.

From 2013 to 2018, the most notable rate of growth in terms of exports, amongst the main exporting countries, was attained by France, while exports for the other leaders experienced more modest paces of growth.

In value terms, the largest MDF supplying countries in the European Union were Germany ($854M), Belgium ($565M) and Austria ($317M), with a combined 53% share of total exports. These countries were followed by Spain, Poland, France, Ireland, Italy, Portugal, Romania, Hungary and Slovenia, which together accounted for a further 39%.

Export Prices by Country

The MDF export price in the European Union stood at $503 per cubic meter in 2018, picking up by 7% against the previous year. Over the period under review, the export prices for MDF reached their maximum in 2014; however, from 2015 to 2018, export prices remained at a lower figure.

Prices varied noticeably by the country of origin; the country with the highest price was Austria ($784 per cubic meter), while Romania ($292 per cubic meter) was amongst the lowest.

From 2013 to 2018, the most notable rate of growth in terms of prices was attained by Italy, while the other leaders experienced more modest paces of growth.

Imports in the EU

In 2018, approx. 5.3M cubic meters of MDF were imported in the European Union; going up by 5.3% against the previous year. The total import volume increased at an average annual rate of +5.2% from 2013 to 2018; the trend pattern remained relatively stable, with only minor fluctuations being observed throughout the analyzed period. The growth pace was the most rapid in 2017 with an increase of 8.6% against the previous year. The volume of imports peaked in 2018 and are expected to retain its growth in the immediate term. In value terms, MDF imports stood at $2.6B (IndexBox estimates) in 2018.

Imports by Country

The countries with the highest levels of MDF imports in 2018 were Italy (599K cubic meters), the UK (570K cubic meters), the Netherlands (469K cubic meters), Germany (463K cubic meters), France (433K cubic meters), Poland (411K cubic meters), Belgium (335K cubic meters), Portugal (269K cubic meters), Spain (249K cubic meters), Sweden (212K cubic meters) and Romania (201K cubic meters), together acoounting for 80% of total import.

From 2013 to 2018, the most notable rate of growth in terms of imports, amongst the main importing countries, was attained by Poland, while imports for the other leaders experienced more modest paces of growth.

In value terms, the largest MDF importing markets in the European Union were the UK ($338M), Germany ($269M) and Italy ($255M), with a combined 33% share of total imports. France, the Netherlands, Spain, Poland, Belgium, Sweden, Portugal, Romania and Austria lagged somewhat behind, together accounting for a further 49%.

Import Prices by Country

The MDF import price in the European Union stood at $492 per cubic meter in 2018, rising by 4.9% against the previous year. Over the period under review, the mdf import price, however, continues to indicate a slight curtailment.

Prices varied noticeably by the country of destination; the country with the highest price was the UK ($593 per cubic meter), while Poland ($320 per cubic meter) was amongst the lowest.

From 2013 to 2018, the most notable rate of growth in terms of prices was attained by Spain, while the other leaders experienced more modest paces of growth.

Source: IndexBox AI Platform