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Raw Material Prices will be Relatively Higher, Volatile

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The plywood, Laminate and PVC board industry is about to witness volatile prices of raw material, largely tilted on higher side compared to 2019 levels. The raw material prices offered deep comfort to manufacturers otherwise more of the plants would have fallen to sick category. During 2020, phenol prices are anticipated to be the biggest disruptor which will impact laminate as well as plywood industry to the most. The anti-dumping duty, safe-guard duty, BIS role and global disturbances are the key factors that will influence phenol prices during 2020. On an average, the estimates reveal that phenol will be 18 to 20 percent higher compared to 2019, although in chemicals and commodities nothing can be said as certain.

The prices of Phenol will see a lot of regulation, where as prices of methanol will depend upon US-IRAN factor, vessel charges and Indian industry payment cycle. According to chemical and commodity experts, Phenol, Methanol and Melamine will be adding to the input cost of laminate and plywood at least by 7% to 10 % range without any doubt. The prices of PVC boards and PVC laminate are expected to remain on same levels as raw material prices does not see any immediate direct impact. With PVC compound availability and weakness in global demand, the raw material price for PVC is anticipated to remain stable.

The timber price for plywood makers will be troubling again, if market demand for finished product goes up. Year 2019, witnessed a price rise reaching to 1000 mark and coming back to 850 again because of weak demand from industry side. Stay order on new woodbased industries in Uttar Pradesh also deterred the timber price levels in the year end. Although whether market demand improves or not, prices of poplar as well as eucalyptus logs will be rising by another 15% July onwards. The arrival of more MDF, Particle Board plants and new modern plywood factories will be helping the strengthening of timber prices be it North India or South. Conclusively prediction for 2020 is on the negative line with respect to profits for plywood, laminate, MDF manufacturers due to higher raw material cost.

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