Stronger particleboard D-l-Y sales expected

By Robert E. Dougherty Executive Vice President National Particleboard Association

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MDF industries are affected in much the same way as the rest of the forest products industry . . and that is not good at this writing.

The housing market disaster has made its impact on particleboard and MDF sales, especially in some of the western states where particleboard sales have traditionally been stronger than in many other parts of the country due to greater familiarity and acceptance of the product.

Manufacturers are trying to grab as much of the DIY market as they can, recognizing that home repairs, remodeling, and fix-up is stronger in a recession economy than other segments of the marketplace. StePPed up activities involving shelving, home plans and projects are being utilized.

But the forecast is not good. One of the most important considerations-and this is almost a Paradox-is that while demand for the product has lessened, supply has also lessened because the raw material from which particleboard and MDF is made-chips and shavings from lumber and plywood mills-is often being used for fuel.

In addition, many lumber and plywood mills have temporarily shut down or are on a reduced shift, meaning that the amount of shavings and chips available is much less than is desirable.

What this has done is to put supply and demand in much better balance than might have been expected.

In the Western states, the particleboard plant capacity is estimated to be approximately 1.8 billion square feet (3/4" basis), while the rest of the country accounts for a little more than 2.1 billion square feet. We estimate that 1981 production for the two regions will be about 2.8 billion square feet. For MDF, the industry's total plant capacity for medium density fiberboard is 668 million square feet with 235 million in the West and 433 million in other states. l98l will probably be about 470 million square feet of production.

California, Oregon, and Montana account for almost all the western capacity of particleboard and MDF; New Mexico and ldaho between them account for less than 150 million square feet, or about seven percent.

Sforyat a Glance

Demand is off as is the supply of chips and shavings . . . on and off closing ol plants probable . . . llmlted production in first half sales affected by promotional opportunities.

Like everyone else, it is difficult to predict what 1982 will hold for manufacturers of particleboard and MDF and for the distributors and retailers who serve the market. If possible, manufacturers are going to keep their inventories down even if it means on and off closings of the mills; there will be limited production throughoutthe first halfof 1982, and there will be a general wait-andsee, close-to-the-vest approach throughout the year.

An important consideration is that no new plants have been built for awhile and, generally speaking, the market has stabilized in terms of buyer-seller relationships. The only real change that will occur in the particleboard and MDF markets in the future is if housing really takes off to the over two million starts that have been constantly predicted and new plants start to see the light of day.

That's awhile off however, and merchants today must be concerned with the merchandise available. In that regard, the Western states-as well as some others-are in an advantageous position. It is axiomatic that the closer markets are to the sources of supply, the easier it is to serve them-regardless of the industry. The key to particleboard and MDF sales will be the awareness and promotional opportunities that exist with particleboard and MDF especially in light of the severe plant closings suffered by other segments of the forest products industry.