Tight supplies and rising prices

At several recent events – the International Softwood Conference in Hamburg and the re-launch of the London & Southeast Timber Trade Association in Tunbridge Wells, industry representatives referenced how strong global demand was creating a dynamic market.

In our opinion column in this issue, Charles Hopping says not to expect too many favours from overseas timber suppliers at the moment!

He also cited uncertainty in the UK softwood sector, with still no agreement over Brexit and the impact of sterling’s depreciation on raw material costs.

Our recent e-softwood update by the Softwood Specialist clearly spelled out the potential challenge of the situation.

Sawmills across northern Europe and the Nordic regions are well sold, and the Swedes in particular are enjoying strong domestic demand under some of the best trading conditions seen in a long time, he wrote.

Importers from Denmark, Norway and Holland are paying top prices for Nordic spruce and pine, and producers of CLS are exporting large volumes to the US.

With currency exchange rates fluctuating it’s a tricky environment for buyers and sellers but the hard truth is shippers can get higher prices on other global markets Timcon have also just issued a further warning on timber price increases, risking higher pallet prices.

At the London & SE TTA relaunch, market discussions on softwood saw traders talk of less volumes traded this year but with hope of a pick up in the autumn. One trader said we would likely see a shift in some softwood volumes away from the UK in 2018 and another that it was cheaper for a European mill to send a container to Shanghai than the UK.

Another said Swedish sawmillers could more cost effectively fill a vessel to the US.

While no-one expects the larger European softwood mills to pull the plug on the UK – we are too important a market for that to happen – the hard reality of economics point to timber availability being an issue going into 2018.

However, as one trader put it, the positive thing is that timber – often seen as an undervalued commodity – may be set for a long-term change as a higher valued raw material.

Panel products are also likely to see more price increases in the near future with supplies remaining tight. Moving on from prices, this issue also features the TTJ Awards Review and our Timber Construction supplement.

The TTJ Awards this year attracted a record 450-strong attendance from a wide range of sectors in the timber industry. My special congratulations go to James Latham on a 10th win of the Timber Trader of the Year and to Geoff Rhodes for his Lifetime Achievement Award. Well done to you both!