Thursday, March 17, 2011

Foreign competition, uncertainty weigh heavily on hardwood

Journalist Emily Hooper in Floor Covering News writes that although hardwood has
long enjoyed a strong domestic manufacturing presence, recent shifts in the trade balance have shed a light of uncertainty on the category’s future. Coupled with the troubled economy and a struggling building sector, this last year is one that is best left behind in the books.

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Of special note, the anti-dumping case made by U.S. manufacturers of engineered wood flooring, collectively known as the Coalition for American Hardwood Parity (CAHP), has reparations yet to be ruled. At press time, the Coalition requested an extension from the U.S. Department of Commerce (DOC) issuing the preliminary antidumping determination, however it is not expected to affect the preliminary countervailing duty determination from the International Trade Commission (ITC) expected March 21.

Across the board, there is a lot of confusion and uncertainty surrounding the proceedings. As far as definitive effects on importers of Chinese engineered wood, Mannington thinks the impact is yet to be felt. “It’s too early to comment,” Duncan said. “We believe in the process to run its course and if the government determines it’s uneven, it will strive to level it.”

Jason Webb, product manager, Harris Wood, stated the uncertainty left a lot for speculation but looked at the brighter side of the situation. “U.S. manufacturers such as ourselves have seen some opportunity for additions to private lines based on drops they experienced.” The majority of change has been in a tentativeness to expand or retract product lines.”

Scott Sandlin, vice president, business development, Shaw Industries, echoed a similar sentiment, stating a dramatic impact is yet to be seen. “We hear distributors and retailers are buying less Chinese product because of uncertainty and there will be some influence as a byproduct of what the numbers are [reached by the DOC and ITC].”

The decision is aimed to affect the entire hardwood industry, not only those who import product from China. “With a potential tariff looming, it is hard to plan or predict the future related to engineered flooring products,” Greenwell said. “The market effect of the potential tariff is a huge unknown, even for products that are not from China.”

Ultimately the decision is thought to have the most immediate effect on competition. “From a competitive standpoint, the biggest impact is that companies importing from China are looking for other alternatives, if the ITC case impacts them negatively,” Armstrong’s Goodwin said. “About 97 square feet out of 100 square feet of the product we sell every day is made here in the U.S. No matter which way it goes, Armstrong is in a good position.”

Uncertainty was prevalent throughout the year, prior to any complaint filing. Figures from the U.S. Department of Agriculture saw a drop in 2010 imports of mainly solid wood flooring from China by 59%. It also suffered a loss in assembled flooring panels: While U.S. consumption rose 1%, imports from China dropped 1%.

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