It didn’t seem possible that anything would knock discussion of Covid and Brexit – or, specifically in Ireland, the felling licence issue – further down the agenda, but the war in Ukraine and skyrocketing energy and fuel prices have done just that.

Demand was already hotting up in the first few months of the year and, with Russian and Belarussian timber now out of the equation and the undoubted knock-on effect that will have on the Nordic and European supply chains, it’s anyone’s guess how sought after Irish timber products will be this year as buyers try to plug the gaps.

For several mills, the big boost to demand came from the fencing market after the storms of mid-February, while for others it was more business as usual. One fencing specialist said that demand coming into the Easter period was “normal”, with no particular storm-induced spike, thanks to the existing stock situation.

“We turned the year with some stock and there was a lot in the ports and also with the customers. In the UK the traditional fencing season doesn’t start until the Easter weekend and it was late this year, so we were still in stock-build up to that. We were sold out for April – but it was only a normal April.”

“Demand is reasonable but probably more contractual-based at the moment,” said one of the major mills, with fencing, construction and pallets and packaging in its portfolio. “There was a lot of damage from the storms but some people are only just getting around to fixing it because of labour shortages.

“Materials have become very expensive and I think some people would prefer two weeks in the sunshine or to pay off their electricity bill than do anything fancy in the garden. I think we’re going to see a more normal year for fencing than the last two, which is probably a good thing.”

However, others saw much more of an uplift. Storm damage and “fears about supply” had boosted demand at another fencing specialist, with particularly strong demand for featheredge and battens, while a major multi-product mill said “the phones rang off the hook” for fencing material.

“Featheredge, posts and sleepers are very busy at the moment [speaking in April] and we’re working on lead times of four weeks-plus,” they said. “For other general sawn fencing, such as rails, we’re probably looking at three to four weeks max.”

On the construction side, one major mill reported being well stocked. “We reduced our inventory from the winter peak but it’s not breaking any records and lead times are short,” they said.

Another major mill said demand for its construction material was strong and that it had expanded its customer base “to ensure we are trading our volumes”. However, a third big mill referred to the UK construction market for C16 as “extremely flat”.

“We feel this is driven by prolonged over-supply,” they said. “Most thought it would be cleared by the end of March but there seemed to be a lot more availability than was expected – even from the Baltics.

“My own suspicion is that this is partly due to the inflated prices – not just for timber but for building materials in general. Builders can’t give fixed prices and are very slow to commit to taking on new jobs.”

The sawmiller added that the imported C24 prices had failed to have the necessary pull-through effect on home-grown. “C24 did jump up for April but it wasn’t quite as steep as people expected it to be or needed it to be with the extra costs of transport and so on. So we are in a bit of limbo at the moment.”

Pallets and packaging, which has been the problem child of the portfolio on occasions, is now “the jewel in the crown” – although, of course, strong demand can be equally testing.

“There is a lot of demand for pallet wood and a lot of panic over Russian/Belarussian log availability throughout Europe,” said a contact. “It is certainly going to hit here as well as the sanctions bite.”

It’s already had an impact for those mills supplementing their log supply with Baltic material.

“It’s going to put massive pressure on Latvian suppliers and we are already seeing enormous increases in prices,” said a fencing, pallets and packaging sawmiller. “I had a contract for January/February/March and haven’t seen a stick of it yet [speaking in early April] but I’ve been told if I want anything for May it’s €104/m3 more. I can’t ask the customer for that.”

When it comes to home-grown log supply, the situation is much better than this time last year, with the felling licence issue backlog largely cleared – although there are still some grumblings along the lines of “it’s not satisfactory but it is sufficiently resolved” and “could do better but manageable now”. And there is still “quite a portion of wood coming in from Scotland with a couple of mills importing to keep stocks up and try to keep a better balance”.

“We only have eight or so cases with the Forestry Appeals Committee (FAC),” said a Coillte spokesperson. “I have to be very clear that on the Coillte side it’s working very well but on the private felling side there is a very big backlog in their licencing process right now.”

There is a perception that, as a semi-state body, Coillte has had some kind of preferential treatment in the issuing of licences but, to set the record straight, Coillte supplies 75% of the logs to Ireland’s processors and last year was awarded 53% of the licences.

And, while the felling licence side has seen improvement, with Coillte now “probably 95% licenced for 2022”, the lack of road permits is severely hampering operations. “We are less than 50% licenced on our road side permits,” said the spokesperson.

“However, this year we have been able to operate somewhat normally. Our auctions are all back [eight auctions a year – two per quarter] and our annual contract event [usually October] will run as normal this year. Generally customers get 50% of their supply from us through annual contract and 50% through auction.”

Last year Coillte achieved its target of offering just over 1.8 million m3 of logs, which was up on its usual 1.65 million m3 to make up for the shortfall of 2020. When it came to it, though, the full amount wasn’t sold because “towards the end of the year mills were quite well contracted”.

The 2022 target is the customary 1.65 million m3 but Coillte hopes to make that up by another 150,000-160,000m3. “We still have some of the 2020 offer that we weren’t able to make because of the licence situation and we will offer as much of that as we can,” said the spokesperson.

Log prices eased from October to February, according to one major sawmiller, although he noted that felling, extraction and haulage costs had all increased substantially since then, resulting in prices “probably equal to where they were in October”.

“There is strong demand for logs at the moment and this will result in a slight increase in log prices over the next couple of months,” he predicted.

“I would say log prices and end market prices have been stable for the last couple of months,” said a contact. “They haven’t really moved significantly since February.”

Another contact agreed that sawn prices had tailed off in November and December as demand across all sectors – bar pallets and packaging – was “pretty low”.

“They really stabilised since February, although sawn fencing prices have been increasing a little. Pallet prices probably didn’t fall in the same way as other sectors, so they were very stable for a four-month period. They are starting to increase as well now.”

Home-grown log supply may be sufficient at the moment but there is concern about the future due to the lack of afforestation licences, with the situation described as “a basket case at the moment”.

“It is still very problematic and very slow, so much so that it is discouraging the agricultural community, even those that want to go into forestry,” said a Forest Industries Ireland (FII) spokesperson. “The bureaucracy that has arisen – people just think why would they bother?

“Ireland needs to be putting in 8,000ha per year and is only doing half of that. And if it doesn’t get its act together soon it will be less than half. It really needs to do about 12,000- 14,000ha per year to meet its climate change obligations, so we’re a long way behind where we should be.”

All that being said, Coillte has just announced a €2bn plan to add 100,000ha to the 440,000ha of forestry it currently manages by 2050. This 22% increase is expected to create 1,200 jobs as well as boosting timber production, tourism and cutting greenhouse gas emissions.

Coillte’s chief executive, Imelda Hurley, has acknowledged that this plan partly hinges on the Department of Agriculture tackling licencing delays.


Sawmills are busy – but “normal busy” or “operating in line with last year”.

“Demand hasn’t gone so high that we are starting to push,” said a sawmiller. “It’s very steady.”

“I think they have a worry that things will slow down but that hasn’t happened yet,” said a contact. “And I think even if it does it might be short term on the basis that demand is still strong – obviously external factors could impact on developments.”

Those external factors include the impact of the war in Ukraine and the hangover from Covid pushing costs up to eye-watering levels. Not only does this hit the timber producers where it hurts but also, of course, it puts a brake on some end markets.

One sawmiller said the war was pushing up the price of imported timber from Germany and creating a fear of shortages. “It’s keeping prices high – obviously we would prefer any other reason for this.”

Another picked out the impact the possible shortages of joinery timber would have on the wider sector. “If you can’t get your joinery timber to do your second fixing in the house, how are you going to finish it? It will have a negative impact on the more standard construction material,” he said. “It’s all intertwined and it’s very hard to work out where it’s going to end up.”

Many of TTJ’s contacts pointed to the pallets and packaging sector as facing the most Ukraine-related challenges.

“Baltics material is largely fencing and pallet wood, so it is going to be an issue,” said a major sawmiller. “We don’t know how it will ultimately manifest itself but you would be nervous that it is going to create shortages.”

The most immediate and obvious impact has been felt in energy and fuel costs, which were already at an all-time high before the Russian invasion of Ukraine.

One contact said he had heard stories of mills whose annual electricity bill had trebled from €1m to €3m and thought that would probably be the case at his own mill.

“A lot of mills are coming off oil contracts that have been in place for two or three years and they are now being absolutely hammered when they are back out into the market looking for a new supplier. They are renegotiating at the worst possible time. It’s the same for all of Europe.”

“There is no factory in the country that isn’t licking its wounds with regards to the cost of gas, electricity and oil,” said a contact. “They are at frightening levels and for a lot of factories they are many multiple millions in terms of extra cost. That ultimately has to be passed on to the consumer.

“Transport fuel is also a big deal. We have fuel price escalators with both inward and outbound hauliers and we have had a couple of adjustments already this year.”

Since April 1, any timber processors in Northern Ireland also had the pain of the UK government’s ban on the use of rebated red diesel. All internal haulage is now fuelled by road diesel. The rebate is used to offset fuel duty and is worth 46.81p per litre.

“You cope with it by a combination of absorbing it and trying to pass some of it on to the customers,” said a sawmiller. “Thankfully the market is good enough that if a customer can’t take on the increased transport costs, then we really can’t continue to supply them.”


In an energy-related aside, sanctions have also hit Russian wood pellet exports. Russia’s wood pellet industry is export-oriented, with 85% of its output destined for foreign markets. As a result, the cost of wood pellets in the UK is rising.

It may be hard to spot any silver linings at the moment but it’s worth noting that Ireland’s timber producers are characterised by their optimism.

“There is an insatiable demand for new homes and the potential for timber over the next couple of years is enormous,” said a sawmiller. “We didn’t need Brexit, or Covid and we certainly didn’t need the war in Ukraine but if we can get a bit of momentum going, some timber frame companies might start looking at using native C16.”

“I hope that people who in the past have steered away from home-grown will come to realise it’s not an inferior product,” agreed another. “This will help to bridge some of the barriers and reluctance that exists in the timber-using market. It’s an ill wind that blows no good.”