Despite widespread uncertainty caused by the threat of war against Iraq and distinctly unimpressive levels of demand in the UK, recent months have brought a slight upward movement in hardboard prices.

One leading supplier calculated the average improvement since November last year at around 5%, although he was quick to add that producers have been largely underwhelmed by the speed of the increase. Meanwhile, currency exchange rates have had a significant impact on what the various suppliers have retained as profit. The higher prices “appear to be sticking”, he confirmed, even though UK demand was “down 10-15%” compared with the same time in 2002.

Another leading UK-based hardboard expert commented: “Material is not in plentiful supply – we could sell twice as much 8×4 3.2mm hardboard if it were available.” This situation had arisen because of a shortage of product rather than “an excess of demand”, he stressed. The lack of “any massive buying sprees” prior to Christmas had raised hopes of a rush of orders during the first quarter of 2003, but demand had nonetheless remained “quite limp”.

Ticking over

His words were broadly echoed by another hardboard market player who said that demand was merely “ticking over” and that, perhaps owing to the effects of the general economic downturn on many hardboard-consuming sectors, “there have been one or two cases of bad debts”.

MDF has narrowed market opportunities for hardboard in the UK by making ever deeper incursions into traditional hardboard end uses such as picture frames and the backs of mirrors. However, many hardboard industry specialists believe that “there is still a niche in the market for a good-quality hardboard”, and even that there are few remaining hardboard market areas into which MDF has the potential to make significant inroads. One operator observed: “The demise of hardboard was predicted 10 years ago when it was said that MDF would take over – but the predictions have proved to be premature.”

Another operator emphasised that hardboard still has its uses – for example, there isn’t a perforated MDF or an oil-tempered MDF”.

So while the number of players in the hardboard sector has dwindled, this trend has left some of the remaining players with what one described this week as “a bigger share of a smaller cake”. One such operator confirmed that, from his company’s perspective, the first 10 weeks of 2003 had proved to be “much better” in business terms than the corresponding period of 2002 and that, thanks in no small part to higher prices, “sanity seems to be returning to the market”. He calculated that, having already obtained price increases during the latter months of last year, his firm had managed to secure further “across the board” rises of around 5-6% during the first quarter of 2003. On average, delivery times were “slightly longer than normal” at around six weeks, he added.

These price increases were directly attributable to “an overall decline in the number of people able to supply board”, he said. Many customers were reluctant to pay more for their material but “hardboard is so short they haven’t really got any choice”. One operator explained: “People who use hardboard generally have to use it, so it is the mills who determine the price. There will continue to be a demand until all the mills close down.”

Polish closure

This contraction in the number of com-panies supplying hardboard was exemplified by the recent news that the Czarnawoda line in Poland was closing down following the withdrawal of government support. However, trade sources believe that a private concern may well be tempted to take on this enterprise given the strength of demand for one of its key products – underlay for parquet flooring.

In similar vein, a northern European producer of both hardboard and softboard is understood to be considering the closure of at least part of its operations some time later this year.

&#8220The demise of hardboard was predicted 10 years ago when it was said that MDF would take over – but the predictions have proved to be premature”

In the meantime, supply of hardboard from some parts of northern Europe has continued to be affected by problems with ice. Ships are still following ice-breakers out of the Baltic ports of Riga and Tallinn and ice surcharges of between £2-3/m3 remain in place. According to hardboard experts, at least one shipment has been cancelled because of the weather, although these difficulties are not expected to persist for many weeks longer.

EU anti-dumping measures have also restricted potential supply from mills in, for example, Poland and Russia. Unreliable shipments and limited shipping availability were also factors affecting certain other exporting countries.

A UK spokesperson for a South African hardboard supplier also acknowledged “a few recent problems with supply because of high demand from Europe, particularly from door manufacturers”, although delivery times quoted to customers were now recovering to more normal levels. He added that prices had been rising since November last year and that further increases were anticipated, although he was still concerned that some overseas mills were prepared to sell “cheap” board into the UK.

Softboard hopes

The softboard market outlook also holds promise. Several contacts expected that the material would become increasingly difficult to source over the coming six months and that prices would continue to rise. One calculated that prices had risen by more than 10% in recent months and anticipated a further 5% hike for the second quarter.

As with hardboard, the early part of 2003 has produced supply issues in the softboard market. In January, Hunton Fiber closed its factory at Larvik in Norway but at the same time announced plans to change to a six-shift system at its Gjovik works, also in Norway.

The change in shift patterns at Gjovik would mean “24 hours a day production all year round”, he added. “Gjovik will be taking up a lot of the Larvik products – particularly in bitumen impregnated boards.”

Notably, several contacts identified strong UK market interest in bitumen impregnated boards. Within the past few weeks, Masonite Africa has launched one such product into the UK for use in wall lining, moisture barrier and expansion filler applications. Meanwhile, Hunton Fiber confirmed that it had secured BBA certification for its Bitroc sheathing product and that this was generating increasing levels of interest among UK timber frame manufacturers.

Sluggish trade

Turning to the market for thin MDF, the possibility of military action against Iraq was being blamed in part for a “sluggish” recent trading period. “The situation seems to have knocked trade confidence,” a leading domestic MDF producer stated this week.

MDF prices have eased across the board since the end of last year although overall demand for thin MDF was described as “steady”. Indeed, a leading producer pointed to continuing strong growth in some key consumption sectors, and most particularly in laminate flooring.

Europe accounts for approaching 80% of global production of laminate flooring; latest figures from the European Panel Federation indicate that output across the Continent soared 25% last year to 382 million m2. Meanwhile, world production increased by almost 100 million m2 in 2002 to 490 million m2.