Steico expects oversupply to normalise

20 February 2012

Wood fibre insulation board manufacturer Steico expects the current market oversupply and price pressure to stabilise in the second half of 2012.

In a trading update, Steico said increased production capacity in the wood fibre insulation board market came on stream at the same time in 2011, leading to the current temporary increase in competition and increased price pressure.

The “normalisationof this situation in 2012, together with strong demand for natural building materials and improved house energy efficiency, made it cautiously optimistic this year, with sales and profits predicted to grow, albeit at a lower rate than previous years.

However, Steico said the European debt crisis was dampening customer sentiment, with some buyers in southern European markets exercising great restraint.

It hoped a clear trend of the market’s development would emerge in the next few months.