How do you assess the current UK panel products market situation?
Overall, the panel market in the UK this year has been relatively stable with progressive increase in sales through the year. Most market segments have seen improvement but not all to the same degree with public sector contracts being the most difficult. The impact of the intervention of the European Central Bank on the exchange has been to benefit imports. Whilst OSB output from our members has remained high, the exchange rate and overcapacity in Europe has resulted in a lot of additional competition in the market. Looking forward there are some signs of slowing in parts of the construction sector but at this point we are expecting most markets to remain steady into the first quarter of 2016.
Is the threat to raw material supply/pricing from the energy generation sector still very real or is it receding?
The Government has initiated a number of changes in its renewables policy such as slashing of support for solar and onshore wind. In respect of woody biomass, the headlines have focussed predominantly on pellet imports to supply coal conversions (particularly to DRAX) but what is less visible is a slow but steady increase in the number of sub 50MW CHP, heat only and waste to energy plant. The evidence is clear, coal conversions have to import wood but over 95% of the wood demand into the sub 50MW plant is sourced from within the UK. The issues of supply and pricing remain a very real threat particularly for the medium to long term when we know that commercial softwood yields will start to reduce from around 2030. Before then, we are likely to see continued local and regional impacts from the effects of new energy plant such as those under development at Cramlington, Teesside and Speyside.
WPIF’s josb done campaign promoting OSB won many plaudits. do you see OSB continuing to grow market share against imported plywood or are they reaching an equilibrium?
The industry expectation is that OSB will continue to take market share from some plywood types over the next few years. The market is well developed now and there is no particular need to continue with generic promotion.
Formaldehyde emissions from wood products are a big regulatory focus in the us. do you expect to see increased attention on this in Europe in the future?
Formaldehyde has been in the regulatory spotlight for many years which as a consequence has spurred numerous research studies such that today there is little that is not known about this chemical. European REACH legislation is currently driving a new phase of regulatory review that will see lower occupational exposure limits introduced. There is robust evidence to support E1 as a safe emission limit from panels but we believe that emission class E2 is now out of step with regulatory processes both in Europe and further afield and the industry is now pushing to have E2 removed from the standards.
The UK government has placed big attention on house building. so do you see a period of sustained growth for panel products?
The benefits arising from the use of panels in a wide range of applications are such that any increase in housing supply will see an increase in the demand for panels. The ideal will be to see the percentage of timber frame buildings continue to increase. For every new house built, new furniture is also purchased so growth in housing can signal brighter times ahead. There is a lot of talk of new housing, we just need to see it on the ground.
What technical and regulatory issues do you see coming to the fore during the next five years?
Aside what we know about formaldehyde, other VOCs including those from wood are the subject of investigation and whilst we don’t envisage any shocks, emission classes will be developed and it is possible that regulatory limits could follow on. With changing construction practices the trend of value adding and developing bespoke products is likely to continue. Away from the market place, industrial pollution regulation plus a need to reduce fossil fuel demand is driving investment in the factories.
