MDF prices may fall further

MDF prices may fall further

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MDF manufacturers fear that prices may further fall due to additional capacities going on stream. In the last few months, some manufacturers have reduced their prices to push up the sales. Though this has not resulted in full blown price war in the industry, some suppliers believe that major manufacturers may go for price cuts to maintain their market share.

Greenply is considered to be the market leader in MDF industry who fixes price for the product which is considered as benchmark for others. Greenply MDF commands premium in the market and is usually priced 3-4% higher than that of Century Ply and 7-8% higher than that of Action Tesa. However, Greenply has decided to wait for one quarter before deciding on any further price cuts.

For example, Greenply is planning to commission its new MDF plant in Andhra Pradesh in June itself which will cater to Southern market. Century Ply which commissioned its MDF plant last year in October is planning to go for expansion. Expanded capacity should go on stream by next year.

With the introduction of GST and later on e-way bill system, players in unorganised sector are finding it difficult to survive with the compliance pressure and whatever price advantage they enjoyed before the introduction of GST has disappeared post-GST. So, it is expected that market share will slowly shift towards organised sector in the coming months. Since unorganised sector was catering to low end segment of the plywood, MDF manufacturers are trying to capture this market.

All MDF manufacturers are in organised segment. Only threat they are now facing is from imported Chinese boards which too may find it difficult to survive with continuous price cuts and rupee depreciation.