It has been an eventful year in Ireland, with the introduction of the euro, a change in government and Ireland’s early progress in the World Cup.
The impact of these three on the Irish timber industry is debatable, with the consensus seeming to be not much on the first two (at least so far) and some loss of production time as a result of the latter.
One piece of news sawmillers will be keeping their eyes on is the impending release of Coillte‘s promised report on why it has changed some of the figures in its forest inventory. This is due out at the end of June and it should be the focus for a fair amount of industry debate.
Some sawmillers say they are still concerned about a possible supply shortage from Coillte. One contact said the recent heavy investment in sawmilling had been on the back of Coillte’s inventory figures.
But Coillte maintains there are no shortages and hints that major windblows in 1998 may be responsible for the inventory change. “Our real problem is not so much a shortage, it’s getting the supply out, the wet weather, access, felling and rights of way,” a spokesperson said.
As for general market health, one sawmiller said: “The market has picked up again but prices are still competitive. I think prices will improve slightly but are not going to go through the roof. If we get prices back to where they were that would be lovely and it may happen over the next two months.”
Keen prices
He said the reason for the keen prices was mainly supply – “there’s a lot of timber”– with new capacity starting to come on stream. He thought it too early to say how the re-elected government will perform but the feeling is it didn’t do too badly last time.
Economic growth is estimated at 5% over the next few years, with Fianna Fail’s re-election promising greater political and economic stability.
The heavy defeat of the Fine Gael party and the rise of many small parties and single-issue candidates may also mark the end of the see-saw politics that have typified the Irish political scene.
A member of the Irish Timber Trade Association said: “The housing market has lifted. It fell back a lot at the end of last year but has lifted again because the government actually took action to try and revive the interest of investors.”
The Irish Timber Frame Manufacturers Association is restructuring and planning to appoint a full-time administrator. The association reckons timber frame’s market share to be holding steady at around 18%, although no reliable figures are available as method of construction does not need to be registered on new homes. This compares to 4-6% in Northern Ireland and 4-5% in England.
The approval of Part L Building Regulations was expected this summer but will probably now be later this year because of the election. It should provide a boost to timber frame, as it can achieve the new standards at a much-reduced cost than brick/block construction.
On the World Cup front, one timber frame builder said he thought the whole industry has been affected by it. “It is an interruption, a blip in output.”
MDF and chipboard
Prices for MDF and chipboard are said to be “firming up”, but the contact added: “We have to fight harder than in previous years. But there’s business there. There is a degree of optimism in the housing sector, with prices allegedly increasing 3-4% this year.”
The commercial side is “reasonably busy” with the shelving business for warehouses generating activity, particularly in Dublin.
Meanwhile, Coillte is upbeat about meeting its supply targets. “We see this year in terms of the market being very good for our logs, particularly the large logs going into construction,” said a spokesperson.
He said the increasing demand was a reflection of the increasing capacity of Irish sawmillers and also a sign of a healthy market. “In terms of price the Irish mills are very competitive,” he added.
Coillte has held 11 auctions this year, offering 1.255 million m3 standing and harvested, compared with 1.244 million m3 in 2001. It expects the amount of logs offered this year to be between 5-7% higher than last year. A total of 1.186 million m3 has been contracted, compared with 964,000m3 last year – an increase of about 24%.
Another development has been Coillte’s purchase of Lousiana-Pacific’s 65% majority share in the Waterford OSB plant. With demand in OSB rumoured to be growing in Europe by up to 30%, Coillte obviously hopes its new venture into the international forest products business will be timely.
