U.S. moulding consumption to rebound in 2012; market could see 'super-cycle' over next five years amid double-digit growth in demand, tight supplies and fewer producers globally
VANCOUVER, British Columbia
April 23, 2012
– Moulding market finally bottoms out in 2011 after four consecutive years of declining consumption
International WOOD MARKETS Group announces the release of the 7th Edition of its U.S Moulding Market Outlook: 2012- 2016. After enduring four years of declining demand of epic proportions, the resultant consolidation among North American and offshore moulding producers has left the industry with fewer but, on average, much larger producers.
As Peter Butzelaar, the lead author of the report notes, "Up until recently, it was moulding distributors who had been the ones with the real negotiating power where they had the option of numerous producers that they could turn to for supply. Today this option no longer exists, as there is a limited number of major offshore and domestic producers remaining and they are now in the driver's seat and are using their new power to set the market tone and raise prices".
In the past, having access to the customers was the key for success in moulding distribution. Going forward, success for distributors will be more related to having access to reliable supply of mouldings, as they are expected to be more constrained. And for producers, success will be more related to having access to a steady and longer term supply of raw material inputs. In either case, whoever has the supply to match with growing demand will be best situated to capture the benefits from rising prices.
The research and market investigations were conducted over a six months period and included extensive modelling and forecasting. Discussions were held with all of the major industry players in North America and the Southern Hemisphere. Mr. Butzelaar's overriding conclusion is that moulding demand is finally on the rise and so are prices. "With tight supply and the expected double-digit growth in demand, the potential of a 'super-cycle' emerging out of the moulding sector within a few years is definitely a viable possibility".
Some of the other implications related to a rebound in moulding demand that is forecasted in the report include:
· Moulding demand in 2011 was split between new construction and repair and remodeling at around 40/60. However; as the housing recovery gains momentum, WOOD MARKETS is forecasting the split to move to 50/50 by 2014 and then new residential construction will overtake repair and remodeling in 2015.
· The North American supply of appearance pine material (shop & better lumber, blocks, and blanks) is forecast to rise by 9.0% in 2012 and, by 2016, supply is forecast to increase by more than three times this to keep up with demand from North American moulding and millwork producers. Much of this growth should originate from Southern Hemisphere imports.
· To keep pace with forecasted accelerating moulding demand, finished moulding imports (solid lineal, finger-joint, and MDF) are poised to play a larger role, increasing their dominant market share by another 5% of U.S. supply over the next five years.
· Paint grade mouldings, namely MDF and finger-joint, remain the preferred choice of consumers consistently accounting for over 80% of U.S. moulding consumption. MDF mouldings are forecast to make further gains at the expense of finger-joint - this will benefit North American producers who already have a cost advantage over imported MDF mouldings.
Based on ongoing fieldwork within the U.S. and offshore supplying regions and interviews with industry leaders throughout the supply chain, the U.S. Moulding Market Outlook report summarizes the key industry themes and drivers and addresses what producers and distributors are doing to prepare themselves for the challenges and opportunities ahead. The key output of the report is the dramatic change in prices that are expected - they are going to soar at times in a few years from strong demand and from a crippled supply chain that can't respond fast enough.
This summary provides just some of the critical strategic topics addressed in the just released U.S. Moulding Outlook: 2012-2016 Report. This 7th Edition report strives to assist senior management to steer the course and capitalize on the coming market opportunities by providing insight, supporting data, and price forecasts that are not available anywhere else. This report predicts where the market is headed for mouldings and domestic and offshore raw material inputs over the next five years.
To review a complete table of contents as well as subscription information, please visit our website (www.woodmarkets.com/p_mouldingmarket.html).