Film faced plywood prices never constantly remain the same. It keeps changing, going up or down as demand, supply, and other factors. This article demonstrates why the current prices are higher than usual and when they will get back to normal. Let us get started!
The Aspect of Film Faced Plywood Price Fluctuation
Film faced plywood prices, and other building materials have skyrocketed in the last years. Since the plywood prices have long been fluctuating, it is not easy to predict whether the rates will go high or down shortly.
Plywood came into discovery and application about a century ago. Then, it instantly grabbed its important position in the world’s economy. Yes, no matter how bogus this fact sounds, it still proves the significance of plywood.
Generally, wood products’ prices vary more often than other building goods. It is because the home building trend is also constantly unstable. Though plywood has numerous uses in commercial projects and marine plywood buildings, the home building / renovating / remodeling constitutes its prominent application.
When did the Film Faced Plywood Price Skyrocket and Why?
Let’s know the reasons!
1- Pandemic 2020
The recent highness in the plywood prices occurred due to the pandemic. The pandemic hit the world during the summer of 2020 and tucked people in their homes. Unable to go on a vacation or workplace, people renovated their spaces. Decks, playhouses, shelves, new cupboards, many different items were constructed using plywood from local suppliers like VINAWOOD in Vietnam.
2- Low Mortgage Home Building
The homebuilding trend became more intense by the autumn of the same year. Single-family housing peaked in 15 years, i.e., since 2006; it’s because the mortgage was cheapest then. Interest rates fell severely. At last, the mortgage rate broke the thirty-year-old stable rate and went down by three percent.
Seeing the low mortgage, people started inclined to the single-family real estate. From 2020 to 2021, low mortgage rates continued the trend of people buying new houses.
Due to the increased demand, the supply shortened. The plywood export companies started expanding their capacity. But the extension itself needs a few years to come into an application, let alone the process of building new mills.
3- High Demand
It is a general rule in business. When the demand for a reasonable increases, so does its price. The same is the case with film faced plywood prices. As mentioned earlier, building projects boosted, ultimately increasing the costs. Usually, people opt for construction more during the warmer years, so its rates are generally higher during such seasons and vice versa for colder months.
4- Limited Production
Since they could not build new mills, all the manufacturers and suppliers wanted to maximize the capacity of present mills. To increase the output, more labor was required, which was a challenge on its own. Often lockdowns kept production services at bay during the pandemic season.
Moreover, companies could not hire new staff for three main reasons. One is the younger generation chooses unemployment insurance bonuses instead of doing jobs. Two is that students now go for higher education instead of persuading blue-collar occupations from the early years of their career. Three: rural areas, where mills are usually situated, decrease population.
5- Enterprise Logging
It does not seem obvious, but trees are drastically falling in numbers with time. Production of more wood products means cutting down more trees. Some companies are responsible enough to keep planting new ones where they just cut. But it is not a common practice yet.
Producing plywood while taking care of the environment costs more. Thus, the ultimate expenses fall on the shoulders of buyers and the plywood store.
That’s why film faced plywood prices increase, which will not trend away. Because with the decline in trees, the resources are diminishing as well. If companies continue with their current ignorant attitude, there will come a time when plywood will be one of the most expensive goods on the planet.
These are the restraints that keep the film faced plywood demand high and supplied low. The past years were when its prices increased due to the aforementioned reasons.
When Will the Film Faced Plywood Price Fall?
Though enterprise logging, processing, shipping costs, etc., are the factors that cause the plywood price to increase. But these elements are not trending away, so we will talk about the demand and supply feature.
Since people have been focusing on their living spaces for 1 – 2 years so, there will come the point when most of them would have bought and built them a house. The insane demand for film faced plywood will decrease, and the prices will get back to normal. It will take almost a year for this to happen. The present situation will continue throughout 2022 and early 2023. By 2023, the norm will return with reasonable plywood prices and lesser housing demand.
Since 2020 – 2021 were years of exceptionally high demand, so, somehow, the current demand is comparatively average. The housing that occurred during the last decade was below the benchmark set by the era between 1960 to 2010. One of the biggest reasons behind the fact is population growth. This growth directly influences the housing demand. It was 0.6% during the last decade, and housing growth was 1.1 million.
Furthermore, the population growth is slowing down due to low immigration and such factors. As a result, it is reasonable to expect the demand for plywood to drop.
Conclusion: Film Faced Plywood Price
There is an average difference of 5% between the spring season prices and the fall season prices of film faced plywood. It’s because the warmer months of the year are the best time for home repair, renovation, building, and relevant tasks. However, the pandemic and lockdown kept the housing trend high despite the time of the year.
The heightened demand will stay the same for 1 – 1.5 years before eventually getting back to normal. As per the expectation based on the current situation, the end of 2023 will be the end of high plywood prices.