Generally, drywall and joint compound don't smell bad.
The normal smell of drywall is difficult to describe, but it's similar to chalk dust, which few people would describe as bad. Joint compound, used to prepare drywall for paint, also has a slight chalky smell. If this doesn't describe the smell of your drywall, the material could have a flaw or the smell could be coming from something other than your drywall.
Function
Joint compound is a semisolid material that finishers use to cover a drywall installation. Joint compound does not typically have a strong smell. Rarely, joint compound has a slight ammonia or sulfurous odor when it is wet. The smell quickly dissipates as it dries, so it should be gone in less than 24 hours.
Continuous Odor
If the sulfurous odor persists for weeks or months, there might be a flaw in the drywall. Some homeowners report that their drywall interiors give off a noxious, sulfurous odor that doesn't go away. Class action lawsuits against some drywall manufacturers claim that the fumes given off by the drywall cause headaches, nausea and respiratory problems, as reported in 2010 by The New York Times. Some homeowners claim that the gases corrode copper wires and pipes, causing significant damage within the walls of their homes. Contact the manufacturer of your drywall and your local health department if you believe this describes your problem.
Expert Insight
In 2009, the Florida Department of Health reported that some drywall samples, when heated, emit trace levels of strontium sulfide, a corrosive gas that can erode copper and give off a sulfurous odor. More testing is required, however, before the results can be considered conclusive, according to a state toxicologist quoted in a 2009 article by CNN. Some drywall companies are preparing to settle with affected homeowners, according to the 2010 article in The New York Times.
Musty Smell
If your room smells musty, you may have a moisture problem within the wall that has nothing to do with the drywall. Mold needs a dark, moist place to grow, so the interiors of your walls and ceilings are perfect habitats, especially in humid basements and bathrooms. If the musty smell persists, hire a mold remediation specialist to analyze the room and determine the scale of your mold infestation.
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