Global Panel Markets: China's Growing Role as Consumer and Supplier

摘要

Following the slowdown/recession between 2001 and early 2003, world panel markets improved significantly in the second half of 2003 as North America led both Europe and China higher. On a worldwide basis, 2004 is setting up to be the best year for panel producers since 2000. But given the dominant global role of the U.S. economy, any slowdown in the pace of U.S. activity in 2005 to 2006 (resulting from tighter monetary policy by the Federal Reserve and/or growing concerns about U.S. government deficits) would quickly affect panel markets outside North America. Compounding concerns about the medium-term outlook for world panel markets is the health of China's economy. A sick banking system and the bubble nature of the properly markets through much of China threaten domestic demand growth if fiscal and monetary brakes are applied as they were in the mid-1990s. The problem for world panel markets in such an outcome is that the substantial and ongoing growth in medium density fiberboard capacity in China would result in substantial exports to keep these mills running, thus threatening producers in Europe, South America, and Oceania.