Los Angeles, CA (PRWEB) February 02, 2014
Particleboard buyers have a buyer power score of 3.1 out of 5, with scores closer to 5 reflecting a stronger level of negotiation room for buyers. Acording to IBISWorld procurement analyst Hayk Muradyan, “buyer negotiation power has declined over the three years to 2013”. Particleboard price movements are heavily dependent on residential and nonresidential construction expenditure levels. Although prices fell during the recession due to sharp spending reductions from these sectors, they have shown subsequent strong growth as rising construction activity in the economy fueled demand for particleboard, leading to price increases.
In addition, the economic recovery has led to greater demand for lumber, which is the major input in particleboard production. This trend has generated large increases in input costs for suppliers, further stimulating particleboard price growth and harming buyers. “The rising input costs have also led to limited pricing flexibility for suppliers, as they struggled to maintain profitability”, says Muradyan. This has negatively affected buyer negotiating power because of minimal opportunities for major price discounts or cost-saving initiatives. Buyers have further been harmed because of high volatility in input costs and downstream industry expenditures. The economic recovery has led to significant spikes in the level of construction activity, with large yearly price fluctuations. This has reduced negotiating power and made inventory planning more difficult. Volatility is expected to continue at a moderate level as the economy returns to normality in the post-recession period.
Nonetheless, buyer power remains strong because of low market share concentration coupled with significant competition among particleboard suppliers. In addition, the commoditized nature of particleboard has led to a wide availability of suppliers capable of satisfying specific buyer requirements. As a result of these conditions, buyers can obtain favorable contractual agreements through bulk purchases of particleboard at lower per-unit costs. Long-term contracts can also mitigate price spikes through price caps and controls, as suppliers will be more willing to include favorable terms in contracts because of greater cash flow certainty. The top four vendors in the market are Flakeboard Company Limited, Roseburg Forest Products, Boise Cascade Company, and Universal Forest Products.
For more information, visit IBISWorld’s Particleboard procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to help buyers of particleboard. Particleboard is a type of engineered wood product made from small wood chips, saw dust or sawmill shavings that are bonded with resin. Particleboard is used in many construction applications and furniture manufacturing, and is supplied by manufacturers, wholesalers and large home improvement centers. This report does not include similar products such as plywood, medium-density fiberboard (MDF), oriented strand board (OSB) or hardboard.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Vendor Financial Benchmarks
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.