UK hardwood demand appears has been patchy of late. Some importers have been blaming quiet sales activity on the frequent holiday breaks over recent weeks while others seem to have enjoyed reasonably busy trading conditions during the same period. A greater degree of unanimity is evident, however, on the issue of supply: many hardwood species are already proving difficult to source and these problems are widely expected to deepen.

Highlighting in particular the reduced availability of American white oak, European oak, sapele and dark red meranti, one UK-based hardwood expert said this week: “This really is going to be the year of the shortage – the question is where are we going to get our hardwood from later this year.” An importer said: “It’s good for us at the moment – it’s an opportunity to make good profits with prices rising and not much material around.”

The reduced supply of American hardwoods has been blamed in part on a lack of container availability. However, a far more key factor in this supply tightness has been strong Chinese buying of many of those hardwoods with an established customer base in the UK, such as American white oak.

Latest feedback from the market suggests UK demand for this species is showing no signs of a downturn. “8/4 white oak is like hens’ teeth,” was the comment from one source. Other contacts said that, in addition to 8/4, supplies of 10/4 and 12/4 white oak were difficult to secure. UK imports of American sawn hardwood increased by 10% in volume terms and by 13% in value last year; meanwhile, UK purchases of white oak bettered the average in rising by, respectively, 14% and 21% to account for 42% of all the American sawn hardwood entering this country.

As reported previously in TTJ, The American Hardwood Export Council has been keen to promote red oak. Despite healthy demand in North America for this species, EUropean demand has remained relatively low. “Red oak is a fantastic opportunity because it is cheaper than white oak and is available in large quantities,” a trader said this week. However, he added that “fashion reasons” stood in the way of substantially increased UK consumption. In 2005, red oak accounted for only 4.4% of the American sawn lumber imported by the UK; in the EU as a whole, deliveries of red oak fell 34% last year to make up less than 4% of overall imports.

Among the other American hardwood species, black walnut retains its long-term vogue status in the UK and has seen significantly higher prices of late. “It’s a hot item at the moment – we’re all struggling to find enough to satisfy the demand,” said one source. Anyone placing an order now would probably have to wait until August or even September for delivery, he added. By contrast, UK demand for cherry and hard maple has been unspectacular at largely static prices.

Chinese demand

Tulipwood has continued to enjoy decent demand in the UK. Prices have firmed by 5% over the past two to three months in response to strong demand from, in particular, China and Italy. Indeed, upward price momentum in the American hardwood sector can be attributed in large part to China’s continuing emergence as a buyer. While the EU remains the leading consumer of US hardwood lumber by region, China has established itself

in third place behind Canada. And it has developed a strong market influence in a number of hardwood species: for example, it imported US$43.7m of American walnut logs, lumber and veneer in 2005 – more than six times the value of UK imports.

China has also been very active in buying sapele logs from West Africa over recent months. Tighter felling restrictions and civil unrest in some key producers in the region have also led to a reduction in the availability of sapele lumber to the European market. With wood said to be “only dribbling through” to buyers on the Continent, prices have maintained a strong upward momentum. A regional specialist commented: “Replacement material just isn’t appearing and there are big shortages coming up. Different stockists are seeing problems with different specifications but, if anything, 3in sapele is really difficult to source at the moment.” Chinese buying activity has also impacted on the supply of utile from Africa, prices of which have continued to firm.

&#8220This really is going to be the year of the shortage – the question is where are we going to get our hardwood from later this year”

Noting tightness in the supply of virtually all specifications of Far Eastern dark red meranti, the same contact predicted: “In the next two or three months, I think there will be a big shortage of red hardwood lumber for the joinery trade. We are not seeing this as yet because consumption has been pretty low in the UK.” Another said that sapele “has been undersold for some time” and that red hardwood buyers were now reacting rather late in the day to steep meranti price increases.

Framire prices have firmed and certain thicknesses – including 1-, 2.5- and 3in – cannot be sourced with ease. Similarly, supply of wawa out of Ghana has been difficult due in part to a shortage of logs. Noting waits of up to six months to receive hardwood shipments from Africa, one source added: “We have heard a few more positive noises in recent weeks. We have certainly got orders customers are waiting to have fulfilled.”

The iroko market has shown glimmers of improvement after a relatively weak spell although, according to most contacts, current price levels do not afford many bargains.

As a general comment, rising energy, fuel and transport costs in Africa have helped to apply upward pressure to many of the continent’s hardwood prices.

Moving across to the Far East, prices of 1-4in sawn dark red meranti are understood to have risen by between US$50-100 within the past two months on the back of low availability. Inventories have dwindled while production has been reduced by the clampdown on illegal logging and by currency movements.

Availability of Far Eastern keruing in the UK appears to have improved but demand has been relatively muted, partly because of a reduced level or orders from the key lorry deck market. It has been suggested that many traditional buyers have looked to switch to alternative materials, including plywood.

Brazilian shipments

As for the Brazilian hardwoods, cedar shipments to the UK have been very limited while prices of the species “have gone through the roof”. One contact said this week that cedar prices had increased by around 30% in the last year alone. Meanwhile, Brazilian exports in general have been hit by the rainy season and lower production levels. Cutting programmes have been adversely affected by the concerns over the strength of the real in relation to the US dollar and by difficulties in obtaining felling permits. “Some suppliers have told us not to even ask for material before the end of May or early June because cutting is two months behind,” said a regional expert.

According to several other contacts, an improved response to enquiries over recent weeks was an indication that the permit situation in Brazil had become more fluid. UK buyers have also reported encouraging post-summer enquiry levels for Brazilian decking species such as ipe and garapa.

Anyone attending last month’s Interbuild show would have recognised the current fashion favouring European oak. Prices are said to have risen by more than 10% in the first few months of the year, partly because of demand from China’s furniture and flooring manufacturers. For UK buyers, the thicker sizes of European oak are proving quite difficult to source, a situation which led one trader to comment: “I think there will be significant shortages of European oak later in the year.”