5.1 Status quo

China¡¦s medium/high density fiberboard has been developing rapidly in recent years. By the end of 2003 the national total output of medium/high density fiberboard had reached 10.49 million cubic meters, making up 93% of the national total fiberboard output (11.28 million cubic meters) (see figure1). According to the latest statistics, China newly added 72 production lines with production capacity of 4.95 million cubic meters per year in 2004 ( Of the total, there are 8 continuous flat pressed production lines with production capacity of 1.415 million cubic meters per year). By the end of 2004 there are 474 medium/high density production lines with the total production capacity of 18.8 million cubic meters per year. It is predicted that by the end of 2005 China will have 520 production lines with the total production capacity of 22 million cubic meters per year (see figure 1 and figure 2).

Table 1 China Newly Added Production Capacity of Medium/High Density Fiberboard in Recent Years

Fugure 2 The Development Of Medium/High Fiberboard Production Capacity

Fiberboard production lines have spread over 28 provinces and counties except Tibet, Qinghai and Ningxia by the end of 2004. The top 10 province and counties have 324 production lines with the total production capacity of 14.25 million cubic meters, making up 76% of the national total production capacity (see figure 3).


Figure 3 The Top 10 Provinces And Counties In Terms Of Medium/High Density Fiberboard Production Capacity

The local experts think that the main reasons for rapid growth of China¡¦s MDF demand are as follows:

 Rapid growth of national economy
 MDF price fell
 Continuous expand of MDF using scope

In recent years the annual average growth rate of MDF sale volume in domestic market has been to nearly 30% which is faster than the growth rate of demand in international market (around 12% of annual average growth rate). However when MDF develop rapidly, many issues needed to be solved are as follows:

5.1.1 Supply of timber raw material falls short of demand. The foundation of many MDF production lines in short term contribute to the shortage of raw material and make some equipment not meet the requirement of operating normally.

5.1.2 The distribution of production capacity is uneven. Enterprises mostly scatter in East China and middle south areas whose production capacity account for 42.2% and 30% of the national total respectively. However there are relatively few production enterprises in North West, South West and North East areas. There are no MDF production enterprises in Qinghai, Ningxia and Tibet up to now. For example, the top 5 provinces in terms of MDF output are in south east coastal regions. Of the total MDF output (10.4875 million cubic meters), Shandong 2 157 500 cubic meters, making up 20.6%; Jiangsu 9 78 600 cubic meters, making up 9.3%; Guangdong 881 900 cubic meters, making up of 8.4%; Zhejiang 865 600 cubic meters, making up 8.3%; Fujian 803 700 cubic meters, making up 7.7%.

5.1.3 The production scale of enterprises is small and renovation of old equipment is slow. Currently home made equipments dominate in MDF enterprises having the average production scale of 39 000 cubic meters per year which is largely less than international average level (100 000 cubic meter per year). The renovation of old production lines is slow and old production lines are even transferred from developed regions to remote areas.

5.1.4 The quality of products needs to be improved. Varieties are simple. The report from the State General Administration for Quality Supervision and Inspection and Quarantine shows that the quality of large scale enterprises¡¦ products is good. However the quality of medium and small scale enterprises¡¦ products is not so good and there are many issues in terms of high formaldehyde emission level, unqualified modulus of elasticity, intensity of rupture and nail-holding power. Up to now most of medium and small enterprises¡¦ dominant products still is medium thickness board (average around 15 mm). Low quality products and single variety have affected enterprises¡¦ benefits and some high quality products still need to be imported.

5.2 Trend

5.2.1 The proportion of MDF in wood-based panel will increase further. According to prediction from local experts, the MDF output among the total output of   wood-based panel will increase to 38% from 23% in 2003 by 2010 which shows that great change will be taken place in the consumption pattern of wood-based panel in future China market. Its features are the proportion of non-veneer wood-based panel (including MDF and particle board) will enlarge and the share of plywood will reduce gradually.

5.2.2 Equipment and enterprises scale tend to develop towards large scale. Statistics show that newly enterprises widely use large scale equipment, especially importing continuous flat pressed equipment  make enterprises¡¦ average production capacity improve markedly. In addition, many old enterprises improve production capacity greatly through technological innovation of old production lines.

5.2.3 Enterprises tend to develop towards the integration of forest and board. in order to guarantee raw materials supply, lower raw materials costs and enhance enterprises competition power, some enterprises conduct some large scale projects, buy forest land, plant fast growing forest while setting up factory (some even in advance) and take forest land as their first production workshop in recent years.

5.2.4 Product structure tends to develop towards diversity. Its features are as follows:
 the output of non-dimension board (mainly large breadth non standard products) will increase;
 The proportion of thin board (especially products for producing impregnated paper laminated floors and replacing plywood) will increase;
 Multi-function (such as antistatic, antiseptic and moisture proof) products will develop quickly;

5.2.5 Green and environmentally friendly products will be increasingly attached importance. The consumers will think highly of choosing green and environmentally friendly products in tandem with people¡¦s awareness of environment protection enhancing. In order to ensure people¡¦s health, China has developed relevant ¡§Standards¡¨ in succession and has strengthened quality control. In this case, enterprises will improve their technology and equipment to reduce environment pollution in the process of producing and using products in order to meet market demand and seek survival.