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Some Chinese plywood factories are very well-equipped, fully automated, and produce a very good product, said one trader, while some have very basic equipment and may even hand-make the plywood. If you deal direct with an unknown Chinese agent, you don’t know what source they are using; or if the stamps on the crates and paperwork are genuine.


The dealer said that his company was currently “reasonable busy” in its trade in Chinese plywood, with fairly stable prices, with the main fluctuations being in container rates.


Here is where more uncertainty comes in, due to President Trump’s tariffs. If the result, as seems likely, is a large fall in demand for Chinese-made goods in the US, there are going to be a lot more shipping containers chasing a lot fewer goods.


Vietnamese plywood, and products made from it, is also big in the US and the proposed tariff there is 46%, and if that were to be applied to plywood, there is another potential disruptor to global plywood markets. Another plywood importer said that container prices from China, having increased dramatically when the Red Sea was best avoided, are currently at the lowest level they’ve ever been. It seems likely that Mr Trump’s tariffs will


make them even cheaper as US demand for Chinese goods falls.


The importer said that the approaching EUDR/UKDR introduction will be very difficult for anyone to comply with. “It requires the co-ordinates of the producing mill, isotopic analysis of the wood used and so on. I have contacted a few suppliers about it and they have admitted that compliance will be very difficult. However, it is still seven or eight months away so there is time to adapt and we are trying to make sure we are ahead of the game. “With regard to the EU dumping investigations of China, it is a concern. We will know in the next couple of months, but we do supply a fair quantity to the Republic of Ireland and I believe any regulations could be retrospective to January 2025. With regard to Brazil, I don’t understand what the complaint is, but I am not too concerned about the outcome [of that investigation].”


Whilst the Labour government’s push to increase housebuilding should be good news for the timber and sheet materials supply side, the importer questioned whether the money is available among construction companies, as well as the skilled labour required to meet the building targets; and he pointed out that the UK economy is not best placed at the moment.


“There have been a few casualties among our customers and some construction companies have failed, so it’s not a pretty


picture at the moment. Last year our turnover was 20-25% down because the price was down about 10%, give or take.” A large timber merchant interviewed for this report, said that they had a “lovely blip” five years ago, due to Covid, but now he felt he was back where he started.


With regard to the Trump tariffs, he felt that the problems would be short- to medium- term. “It will either get sorted or it could escalate into something much more than a trade war,” he said.


“I think it could go on for a year but Donald Trump has four years before the next US election.


“If you strip out last week [speaking before the tariff announcements], we were going really, really nicely. Our first quarter was 13% up in sales on the same time last year and our gross profit was up 19% and we were looking at that continuing and it is still very buoyant this week.”


He said that he could not get consistency in the hardwood plywood market. China produces about 50% of the world’s hardwood plywood these days and there are some good factories out there, he said, adding that there are also some that stick with the old tradition of making the cores in one factory and then applying very thin face veneers in another. “Wherever we can we substitute structural softwood plywood, good-one-side, for hardwood, with Type 3 glue throughout, from South America. It is strong and reliable, it’s just not paintable.


The majority of Chinese hardwood plywood is Type 2 glued because the face veneers are so thin, dark phenolic resin would bleed through.” Type 2 plywood is not sufficiently durable for outdoor use.


The merchant said that Finnish spruce plywood is still strong in the market, while French maritime pine plywood is “superb”, but there is not much availability. “Any anti-dumping tariffs are going to have a much bigger impact on plywood because it is a diverse product and much of it is made in China: Finished products, too.” The merchant went on to say that the current market in the UK is pretty strong. “The weather helped in Q1,” he added. “Short of a global meltdown I think we’re in for a reasonable run, with the exception of hardwood plywood, where I think prices are going to fall dramatically because of the US tariffs.”


If the tariffs don’t hit plywood directly, they will hit Chinese manufacturers that make furniture from it for the US market.


OSB DEMAND


With regard to OSB, the merchant said that spare capacity on the market is very limited and he felt that we are likely to see OSB demand – and therefore price – increasing. “That price increase is desperately needed.


OSB volumes are currently only fractionally up on 2020 and I believe the only way is up.” If the UK government’s push for more housing is realised, even 100,000 to 150,000 units will lead to increased demand for plywood and OSB. “However, if there is a massive trade war and global depression, then all bets are off, but I still think we are not far from a ‘pinch point’, where OSB availability will go down and prices up.” One large trader, mostly in UK-produced OSB, said that in the last six months or so, demand had been there, but the price had been very low.


UK and European demand had shown signs of improvement in March, he said, and he felt that Q3 should see an improvement in price and demand for UK suppliers. He said Latvian OSB prices were a lot firmer. “2024 was a time to survive and the first two quarters of 2025 have still been disappointing, but I am hopeful that Q3 and Q4 2025 will improve,” he said. “Everybody’s margins have been squeezed because they have been going for volume.”


A European manufacturer of OSB agreed that timber and wood-based panels are exempt from Trump’s tariffs [thus far at least], so they shouldn’t affect the plywood and OSB business.


That’s just as well as the spokesman said that 300,000m3


of OSB goes from Latvia to


the US and would create a problem if it had to go onto the European market. He said that demand for OSB had picked up during April and he felt the improvement was likely to continue into Q2.


January was not as good as he’d expected, but February and March had shown some improvement, continuing into April. “We are selling everything we make, but prices have been bumbling along the bottom across Europe for the past 12 months. The only way is up, it’s just a question of when. “All European manufacturers are putting their prices up and we are likely to see a decrease in volumes coming to the UK, particularly if Germany picks up,” he said. He anticipates that UK housebuilding will continue to strengthen with the government’s push to build more homes and said that Taylor Wimpey and Countryside Homes have built new capacity for construction of timber frame elements and that all the major housebuilders are following suit. The spokesman also said that the market for OSB4 is growing in the UK as a heavy-duty board and he added that airtightness in UK new housing, with the impetus for energy- efficient homes, is creating one of the biggest growth sectors.


He concluded by joking that prices will definitely go up, down, or stay the same, indicating the difficulty in predicting the market at this time. ■


www.ttjonline.com | May/June 2025 | TTJ


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