The wood panel manufacturing sector is lobbying the government over soaring gas prices which, if sustained, could lead to cutbacks in MDF production.
The Wood Panel Industries Federation (WPIF) has written to energy minister Malcolm Wicks to communicate the sector’s concerns about gas prices, which have risen from 30-40p a therm to 170p during recent weeks, costing WPIF members, on average, an additional £1m per month each.
WPIF director Alistair Kerr said: “If that level of price rise is sustained we would start to see companies in the sector scale back production. They will all be considering that action but it’s not a decision that would be taken lightly.”
Mr Kerr, who is also calling for an investigation into energy company profiteering, said the drying process involved in MDF manufacture was particularly gas energy intensive.
Norbord said its energy input costs had grown by about 25% during the last 18 months at a time when product prices had eroded due to the poor economic climate. It is monitoring the “concerning” situation daily and is considering restricting MDF production, as well as securing product price increases.
Lawris Panel Products said at least one mill was passing on the costs to customers, which would “eventually hit the end user”.
Meanwhile, in the sawmilling sector, BSW Timber plc said current price increases meant it was looking at year-on-year energy cost inflation (including transportation) of more than 25% next year, while James Jones & Sons Ltd, described the gas increases as “pretty severe” in terms of kiln drying processes.
