FEATURE MARKET DEMAND
Product Availability Pressures
As has been reported widely in recent months, the shortage of raw materials entering the UK has seen reduced volumes and increased costs across the board with timber prices increasing.
T
hese problems have been intensified by Brexit, alongside
their outdoor building. According to reports in ThisIsMoney, shoppers
general port and freight movement complications. Also,
in the UK could pay up to 50% more for their garden sheds due to the
with timber in short supply across North America in
global shortage of timber.
particular, sawmill closure and the effects of Covid-19
“We’re now in the second year of timber shortages and the impact
lockdowns have slowed production to a snail’s pace, seeing global
is beginning to be felt,” said Charles Walton, Kybotech founder. “We’ve
supply and demand under pressure. In the USA, the price of timber has
had two consecutive warm winters which has meant considerably less
risen by more than 180% since the Spring of 2020.
timber being felled and resulting in a massive global shortage. Other
A joint statement on UK product availability from the Builders
factors have come into play too which have compounded the problem.
Merchants Federation (BMF) and Construction Products Association
Combined they have the potential to push up timber prices by as much
(CPA) in early March stated that: “Builders and builders’ merchants
as 50% and at some point a proportion of that cost will be passed on to
alike are being adversely affected by limited availability in a number
the consumer. At some point and as the shortage worsens, we will be
of important product groups. The continuing impact of Covid is one of
left with little choice but to increase our prices.”
several factors behind the shortages and price increases but the overall picture is more complex.”
However, the Timber Trade Federation (TTF) reported that softwood is spearheading a ‘timber import resurgence’. Despite imports of
Talking of timber specifically they said: “Timber is a global
softwood falling by 24% in Q1/Q2 of 2020, the volume of softwood
commodity and there is an imbalance between global demand and
imports ended up 3% higher than 2019. This came after 4.9 million m3
supply that is not likely to be resolved in the near future. The UK must
was imported between August and December 2020. Hardwood imports,
be prepared for higher prices to continue. European production was far
plywood, MDF, and OSB all saw similar trends meaning the cumulative
lower in 2020 compared to 2019 (Swedish production down 7%, stocks
total for all timber imports in 2020 was just 3% lower than 2019.
down 27%: Finnish production down 15%). UK imports of softwood
David Hopkins, CEO of the Timber Trade Federation (TTF), said:
during the first nine months of 2020 were also down, by 20% in volume.
“After the first lockdown in March last year the timber industry, just
Production shortages were exacerbated by extremely high demand
like the rest of the UK economy, came to a near standstill, and the
from the USA – which will continue throughout 2021.
volume of timber being imported fell sharply. Meanwhile, demand
“The Chinese timber market, which was supressed during Covid, is now
increased dramatically, both in commercial construction – which has
rising with imports of softwood at their highest ever levels. Furthermore,
managed to carry on during the pandemic – and domestic projects, as
both the US and China are prepared to pay far more for timber. In the US,
so many people were forced to spend more time at home and spent
the price of a benchmark 4x2 softwood product rose by 149% last year.
their disposable income on refurbishment rather than holidays or other
European mills are back at full capacity, but the increased demand means
bigger ticket items. It has led to timber becoming one of the most
that customers are on allocation, and the situation is likely to get worse in
sought after commodities in the UK. The higher levels of import should
Q3 following holiday shutdowns in July and August.”
help ease some of the pressure we have seen between supply and
The pandemic has also seen DIY and home projects soar with many retailers running low on stock of timber garden furniture. Shed
demand, though we do expect the tight conditions to continue well into 2021.”
manufacturer Kybotech is warning consumers that prices will rocket as More at www.constructionproducts.org.uk www.ttf.co.uk
summer approaches with customers potentially left waiting months for
Timber Trader UK Magazine
Spring 2021
34
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