MELBOURNE – Forest industry analyst BIS Shrapnel estimates that the Medium Density Fibreboard (MDF) industry has recovered from the effects of overcapacity that hindered producers with low prices and profitability through much of the 1900s and 2000s.  The company forecasts that production should increase at a rate of 2% to 3% per annum, from an estimated 47 million cubic meters in 2006 to 52 million cubic meters by 2011. MDF consumption is expected to rise from 44 million cubic meters in 2006 to 55 million cubic meters by 2011, out-pacing anticipated production.

Europe is expected to be the fastest growing producer of MDF, with plans for eight new plants in the region. The biggest consumer is expected to be China, accounting for approximately 45% of the worldwide demand by 2011. Although China has a huge production capacity of its own, the country is highly dependent on logs imported from Russia. It is not anticipated that Russia will be able to fill the lumber supply needed by the Chinese economy – which is expected to grow at a rate of 8% to 10% per year – leading to increased opportunities for importers to China.

One major concern for a mostly rosy world economic outlook is the potential for a slowdown, or possibly even recession in the United States, according to BIS Shrapnel senior manager, Bernie Neufeld.

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