UK chipboard import statistics released by the Timber Trade Federation show that volumes were down in 2015 by 5.3% to 665,000m3.

Belgium took advantage of a gap in the market, as well as the high price of Sterling to put product into the UK, but France (-12% reduction in UK exports) and Ireland (-29%) both saw their market shares drop.

As for Germany, the latest figures coming from the country suggest that its chipboard producers staged a recovery in their exports in the final quarter of the year.

The German Federal Statistics Office said German raw chipboard exports to the UK saw a 20% increase in 2015 to 101,754m3, with Germany also putting a lot more chipboard into the Dutch and Italian markets.

However, Germany’s chipboard mill export volumes in total were very similar in 2015 to the previous year, hovering at the 930,000m3 mark.

MFC exports from Germany to the UK also grow by 20% to 68,952m3.

A significant increase in particleboard shipped from Latvia was recorded in 2015, resulting in the country winning a 4% share of UK imports.

The volume of particleboard imported in December 2015 was at its highest level for a December since 2007.

Meanwhile, the green light given by the European Commission’s Directorate General for Competition to the Sonae Arauco joint venture has been a big news story.

It approved the deal, saying the two companies will have a moderate market share in Europe even after the activities merge. It represents another big expansion in the global ambitions of South America based panels producer Arauco.

The deal sees ARAUCO subscribe to 50% of the shares of Sonae subsidiary Tafisa – which owns 10 panel mills that are distributed in Spain, Portugal, Germany and in South Africa.

This includes some 2.27 million m3 of chipboard annual production.

MARKET PULSE

"It’s quite clouded at the start of the year," one large UK chipboard distributor told TTJ. He reported that European mills needing to shift volumes represented a buying opportunity for large end-users.

He said European producers had capitalised on the gap which appeared in the UK chipboard market last year because of the shortage of British product on the market and the high price of Sterling.

But the weakening of the pound has changed the landscape and price increases have been a priority for producers.

Many operators have been holding off forward orders, the contact added. The contact reported specification shortages on some sizes, and said it was best to plan in advance if you wanted 8×6 product.

"P5 board is very competitive and not overly buoyant. But if housebuilding picks up, it wouldn’t take a lot to lead to a price increase and cause a shortage. The housing forecasts talk of growth, but when?"

Another contact, on the UK production side, said it would place further emphasis on value-added chipboard, with new investments in lamination to increase output.

He said a lot of his company’s products were going into student accommodation and hotel contracts.

"We’re dealing more with architects," he said. "Some have a negative view of chipboard, so it’s a case of explaining the product and telling them that the technology has moved on in the last few years.

"There is pent-up demand there and clearly we need to be building a lot more houses. I’m fairly optimistic about 2016."

He said production levels were broadly mirroring 2015.

One continental producer said it had targeted the UK last year with raw board because of increased price levels, reporting good results in several markets including upholstery.

But it said this was a short-term measure as it was more focused long-term on specific products such as 38mm P6 grade mezzanine flooring and value-added products.

"We do not see any change with chipboard at the moment in the market," it said.

He reported the shopfitting and kitchen sectors as going well, highlighting 8mm MFC for furniture applications.

He also mentioned that UK merchants were often getting four or five chipboard suppliers calling them offering product and the merchants have been able to hold out for the cheapest possible price.

The impending UK Referendum on EU membership was flagged up as factor which could cause market uncertainty in the coming months.