Choppy waters could become norm

The UK softwood industry has to adapt to trading in more demanding and volatile global market characterised by much sharper and more frequent swings between shortage and over-supply.

That was the message delivered to the London Softwood Club last week by guest speaker Mark Bowers, timber group procurement director at Jewson's parent St Gobain UK.

The old structures of the industry and the sharp delineation between importers, agents and merchant distributors, he told the 75 strong audience, had broken down.

“And we have had to get used to handling a broader range of products and managing the expectations of more diverse and more demanding customers,” he said.

The other big change the sector had to acclimatise to, he said, was the true globalisation of the marketplace.

“Today we are talking about demand in the US, Japan, North Africa, Spain, China and so on and how this all impacts on our own market in the UK.”

The turbulent conditions in the international softwood market over the last 18 months, Mr Bowers maintained, were not an aberration, but a foretaste of what is increasingly likely to be the norm.

“When the US and Japan improve, combined with huge demand from China and India, we are likely to see renewed shortages,” he said. “And in the next few years, these pressures will inevitably come to bear on price. I think we’re in for a bumpy ride!”

The softwood sector, he maintained, would have to get used to operating more as a fluctuating global commodity business, much in the same way as the panel products industry had done.

“We have to learn lessons from the panel products guys,” he said. “We have to be able to take advantage when the market is strong and not lose it all when the market turns.

“I believe this will leave much less scope for speculative trading. Rather than buying from a source today, but not tomorrow, it will be about committing to more long term supply relationships that will see us through the difficult times.”