Can you pass increased costs to plywood prices?

October 08, 2021. – Microchips and wood panels got a new friend in September when electricity joined the club of soaring prices. There are several short-term reasons for the increased prices, but also the long-term impact of the transition to greener energy sources.

For the manufacturing industries, like plywood, electricity price is a significant cost element. Electricity consumption is on a constant rise, and it is easy to forecast that the prices are not getting cheaper. It means that plywood production costs get higher. Logs, labour, and glue & coatings naturally have their own price development. However, all the costs tend to increase in long term.

For plywood sales, the increased costs are a way to justify price increases. Buyers can accept these increases if the other plywood suppliers are asking for the same, cost-derived price increase. But.., then there is demand and supply balance. That finally dictates where the price is set. 

Too much demand or too much supply can dilute all the cost-related sales arguments.

It makes sense to work hard on cost control even in times of high plywood prices. Customers are not interested in suppliers’ costs because they have costs of their own as well.