What is happening with Timber prices...?
Timber, alongside other materials, such as cement, steel, plastics and silicone, has risen dramatically in the past 12 months. What has caused this?
🌳 Prices for sawn dried timber for construction are up between 50-80% as shortages become more acute.
🌲 Mills globally have been on limited capacity as COVID impacts the labour force. This is true in harvesting capacity, mill production capacity and transport. Stock levels at ports, which buffered supply and demand problems, have not been able to rebuild since the start of the pandemic.
🌳 Demand for timber globally is growing very fast and the UK is not always prepared to pay the highest prices for imports. The TTF is forecasting rises in timber markets until at least 2025.
🌲 Russia has shut off the export of Roundwood; New Zealand and Australia are having major issues balancing domestic consumption with exports; the US and Canada have repercussions of pests and disease on standing stock. All of these factors affect imports to China and the US which are by far the world’s largest importers, leaving them looking for non-traditional routes and competing with our traditional importing routes. The US is taking increasing quantities from Europe.
🌳 A severe 20/21 winter in Eastern Europe and Scandinavia has slowed harvesting and hence supply into mills. At the same time, annual summer maintenance closures are now approaching in the mills reducing the outturn of sawn timber.
🌲 The Food & Agricultural Organisation and Gresham House estimate the global demand for timber by 2050 will be 5.8billion m3 with a sustainable supply capability of 3.7-4.7m3. This naturally pushes up the globalised commodity price for timber.
🌳 Brexit regulations are still poorly understood. Import and transport of timber continue to be problematic.
🌲 Different sectors of the timber industry are actively lobbying sawmills to divert timber. For instance, the pallet sector, which has seen prices rise by 13% for home-grown timber, is pushing the fact that they are not seasonal as fencing and not as prone to demand spikes as construction therefore should be higher on the priority list for timber.
We hope the market will stabilise and prices plateau toward the fourth quarter of this year, with some suggesting prices will fall slightly... however the markets are uncertain.