In June, the GTI-Woodbased Panel (GTI-WBP) Index registered 46.3%, an increase of 3.7 percentage points from the previous month, was below the critical value (50%) for 3 consecutive months, indicating that the business prosperity of wood-based panel industry represented by the index shrank from last month, however, the contraction eased.

On the demand side, the new orders index increased 8.5 percentage points to 48.5% near the critical value, indicating that the contraction in orders for the wood-based panel industry eased and there were signs of stabilization. Particularly, the export orders index had maintained growth for three consecutive months to reach 50% this month, indicating a gradual stabilization of the overall export orders for the wood-based panel industry.

On the supply side, the production index registered 43.3%, a value below the critical value for three consecutive months, revealing that the total production of wood-based panels continued to decline. One reason for this is the downturn in the global construction sector, leading to overall excess production capacity in the wood-based panel industry and low operating rates for production. However, in some countries, the industry was still expanding production capacity, so how to expand domestic and overseas sales channels, run down the inventories, and alleviate the pressure on capital flows had become a pressing issue for the enterprises. The index also revealed a slight increase in the inventory of wood-based panels compared with the previous month, due to the overall insufficient demand and the not timely de-stocking of wood-based panel, as reflected by the index for finished products inventory which rose above the critical value to 52.9%.

From a price perspective, the purchase price index for raw materials registered 46.2% that fell below the critical value after two months, indicating a decrease in raw material costs and a relief in cost pressure for wood-based panel manufacturers.

In terms of market conditions and developments, in June, the GTI-Indonesia enterprises reported an increase in plywood exports, however, the global market conditions (especially in Japan) for plywood products were still unstable. The GTI-Malaysia enterprises reported that plywood prices in June remained weak. Brazil's plywood exports showed positive momentum, and in May 2024, tropical plywood exports increased 9% in volume and 11% in value when compared to May 2023, rising to 3,500 m³ and US$2.1 million, respectively.

GTI-Woodbased Panel (GTI-WBP) Report - June 2024.pdf