22 | Sector Market Update: Softwood


SUMMARY


■A number of large distributors have been actively de-stocking C24


■Shipping lines report volumes of TR26 and CLS are down


■Pest infestations and the hot weather are affecting logging activities


■Exports of pallet wood from Latvia have fallen


■Joinery quality productions are steady


IMPORTERS ACT TO CORRECT THE MARKET


As the trade reached the end of the half year, all markets are generally quiet leading some softwood importers to focus on the products that perform the best while reducing their commitment to those that are yielding the lowest returns. Jerry Wilson reports


The main casualty of current conditions as mentioned in our June TTJ softwood update (ttjonline June 26), is the strength-graded sector, with C24 in particular under the spotlight.


A significant number of large distributors have been actively de-stocking the product and operating on a ‘just in time’ replacement basis, while others have completely removed it from their product range.


Apart from poor demand, the main reasons for exiting the market are the all too frequent cycles of crashing prices, which undermine inventory values. Even today, competition between some Swedish producers to try and maintain market share has continued to influence the UK market’s loss-making price structure.


Above: Volumes of rounded posts are replacing C24 cargoes at a number of UK ports


TTJ | July/August 2023 | www.ttjonline.com


In terms of carcassing, there was an initial shortage of 6m lengths when import restrictions were first imposed on Russia and Belarus where the majority of these lengths originated. At the time they commanded a steep premium, but because UK demand for structural wood has remained subdued, the shortages of 6m have not had such a great impact. The current supply appears to be sufficient, from both Baltic and German producers, to meet most importers’ needs depending on the specification required. Some


buyers have supplemented original lengths with finger-jointed material.


The downturn in demand for structural wood has been noticed by some of the shipping lines who report cargo volumes are down and are being replaced by other products more in demand. Volumes of TR26 and CLS have also dropped as the number of new building phases put on hold has increased with the tightening of the economy and the rise in interest rates.


Since the prohibition of imports of Russian and Belarussian wood, the most noticeable gap in the market has emerged as rounded and cundy-peeled posts. Their production relied heavily on eastern bloc sources for raw material, and now the processors centred in the Baltic states are searching for supply in western Ukraine, Poland, Romania and anywhere else they can find suitable fibre. Demand from the agricultural sector for these posts remains strong and it is quite a common sight on the quayside to see thousands of cubic metres replacing the stacks of carcassing that were commonplace in the past. There are questions from this sector regarding the durability of treated softwood posts and some end users are looking at alternatives. This is an issue the timber trade, combined with treatment manufacturers,


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