Timcon, which issued an earlier warning in June, said market conditions had changed rapidly during July and August, with reported timber price hikes of more than 20%. This, it said, was leading to a dramatic increase in pallet prices, as well as problems with availability.
“TIMCON advises that there are currently no signs that supply volumes for the UK will increase in the near future and that prices are continuing to escalate on a monthly basis,” the group said.
It attributed the situation to high demand for timber throughout Continental Europe, with timber from the Baltics, Scandinavia and Russia (traditional suppliers to the UK pallet industry) being diverted to other European countries. Some pallet factories in Europe have not been operating at normal capacity, while pallet and packaging price growth of more than 50% has been reported.
TIMCON said most UK sawmillers were operating at full capacity and could only fulfill about 30% of the UK pallet and packaging industry’s requirements. It warned that the situation would become more critical as demand increases following the summer holiday period.
Escalating energy prices are also leading to significantly higher costs for heat treatment and drying of timber products at a critical time in the introduction of the international phytosanitary standard ISPM 15.
