During the recent EPF General Assembly, held on 24 November 2005 in Brussels, the overall sentiment among the European wood-based panels manufacturers was rather positive for the future. While production costs continue to rise, demand failed to provide a decisive impetus during the first 3 quarters of this year. Following the record year 2004 with outstanding production growth and improved demand levels, in particular the particleboard manufacturers experienced a difficult start in 2005. The markets picked up moderately after the summer holidays and further improvements are expected towards the end of the year and beyond. Evaluating the developments on the wood-based panels markets for the first nine months of 2005 during their General Assembly on 24 November 2005 in Brussels, the EPF members concluded that the strong recovery that initiated in 2004 ended at the beginning of 2005 and caused a sharper than expected setback throughout three quarters of the year. Subsequently, the record levels that were achieved in 2004 have become a difficult target for 2005, but the producers attending the EPF meetings were optimistic for the future.
Despite a minor recovery during the second quarter of 2005, particleboard production contracted by nearly 2% during the first nine months of 2005. While the output fell by 4% and more than 2% during the first and third quarter respectively, the decrease in consumption was much more severe. During the first nine months of this year, demand reduced by more than 5%, dropping even under its level of 2003. In addition, the disappointing market opportunities have also been causing a striking upward stock movement since the beginning of the year. Although there are regional differences, the situation improved recently and the outlook for most European markets is generally positive for the end of this year and the beginning of 2006.
MDF production took an exceptionally vigorous start in 2005 with an increase by more than 6%. During the second quarter, production growth plunged below zero for the first time in five years, though a recovery was established in the third quarter with more than 4% growth. During the first nine months of 2005, MDF production increased by nearly 3%. However, this increment was almost exclusively driven by foreign demand. Exports accelerated by more than 5%, whereas European demand fell by almost 5%. Nevertheless, the positive trend in exports only appeared in the second half of the year, when foreign demand improved after a 3% decline during the first six months, whereas home sales have been negative throughout the year.
During the first nine months of 2005, European OSB production has been growing modestly according to a 3% increase. Also for OSB, home sales and European demand have been facing a declining trend this year, whereas exports proved to be the main engines behind growth. In particular, shipments to North America have been skyrocketing, spurring exports to an overall 11% upswing during the first three quarters of this year. In addition, since sales have been outperforming production growth, stocks experienced a clear downward movement and are now hovering well under average. As such, OSB remains the fastest growing panel type in Europe.
Overall, the general sentiment during the meeting pointed to cautious optimism for a rebound in the wood-based panels markets that is expected to take place by the end of the year and in 2006, in line with the forecast recovery of the construction and furniture industries. However, the continuing cost increases were a cause of concern for most producers.
Concerning the activities of the federation, the members of the Managing Board evaluate the progress with the Roadmap 2010 project of the European Confederation of Woodworking Industries (CEI-Bois, of which EPF is a member), which is designed to increase the consumption of wood products substantially by 2010. In the framework of this project, EPF is leading the Wood in sustainable Development Process in co-operation with the European Organisation of the Sawmill Industry (EOS) and the Nordic timber Council (NTC).
The EPF members welcomed in particular the formal approval that was received from the European Parliament to organise an exhibition entitled Tackle Climate Change: Use Wood in the European Parliament in Brussels on 7-9 February 2006. The aim of this exhibition is to present the European decision makers, and more specifically the Members of the European Parliament, with the positive contribution of wood-based products and the woodworking industries to sustainable development and to society, so that they get a positive image of our sector and its products as well as a better understanding of the economic importance and our contribution to employment and welfare, in particular in rural areas. The French member of the European Parliament Mrs Catherine Guy-Quint will host this exhibition.
For this exhibition, EPF is also contributing strongly to the creation of a true Book of Arguments, which shall deal with the environmental, technical and economical advantages of wood and wood-based products. The book envisages informing the reader in an informal style. The content will mostly consist of providing clear answers to questions occupying the public, such as Does Wood burn? In first instance, the Book of Arguments will be addressed to the European policy makers at the European Parliament and European Commission as well as to their counterparts in the EU member states.
Finally, the EPF members nominated Mr Carlos Bianchi de Aguiar, CEO of Sonae Indústria, to the Managing Board of EPF. They also welcomed the company Altanis GmbH as a new associated member of the federation.
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