| 21
volume to market than in 2019]. We will make up half of it this year and half of it next year.” However, private growers are still vociferous campaigners about licencing and held a major demonstration outside Irish parliament on November 3. They say the licence backlog has doubled to an estimated 5,000 applications in the last 18 months and claim they haven’t been treated in the same manner as Coillte, the state forester. Having said that, the volume of material from private estates on the market does indicate that some material is getting through, said a contact. Log prices rose inevitably and inexorably during the shortage but as one sawmiller said, “the grower has to make money too”. However, he added that prices are now “probably 10-15% too high” and that while he doesn’t expect them to change much, he does think they will come down “a little”. And, of course, the elevated log price is incorporated in his selling price.
“If we pay high, we sell high,” he said. Another contact added that continuity of sawn timber supply was crucial, so “we are paying big money to get the logs to make sure our customers are satisfied. I think we made the right decision”.
Coillte’s log price index follows the end
market price, although, of course, the caveat is that logs are bought a few months up front and if sawn prices do fall in the interim the mills will suffer some discomfort. Fortunately demand is still strong and sawn prices are still very high, although, as with the wider timber trade, they are falling back in some areas.
One mill’s prediction back in April that the price of KD C16 might reach £330/m3
by the
end of this year had already been exceeded by about 10% before TTJ spoke to them in October.
Ireland’s construction sector is as busy as the UK’s and orders are still coming in for the same volumes, said one sawmiller. Demand for carcassing is still very healthy, with mills working with “pretty low stock levels and a bit of a lead time”.
“I think demand [for carcassing timber] will stay fairly strong towards the end of the year,” said a contact, adding that it could be affected by the availability of imported C24. Another said his mill was still taking calls from potential new customers looking to source new supply and he agreed that the volume of C24 held up at UK ports was “probably creating a little bit of uncertainty”. “But you have to look more to the long term,” he added. “Once more of the material has pushed through the terminals, then I think everyone can push on again into a positive year. We certainly have a very healthy order book.”
The concern is, of course, that the hurry to unpick the bottleneck at ports and shift
timber might lead to offers and a tumble in prices rather than the stability the sector so sorely needs. However, one major sawmiller said that the days of cheap timber are over.
“There are too many variables,” he said.
“Too many [price] increases, whether it’s labour, haulage, energy, insurance, all the costs have rocketed and they aren’t coming down. If timber prices come down and you go to your energy supplier and say you want 40% off your electricity it isn’t going to happen. The costs will be absorbed forever in timber prices.”
The pallet wood market is also very strong, with manufacturers “being offered a lot of stock” and expectations are that pallet wood business will be good into the New Year. But the tightness has gone out of fencing supply. “There is seasonality in fencing and while we didn’t really experience that last year and part of the year before, it is more apparent this year,” said a sawmiller. “August has traditionally been a quiet month and with holidays opening up this year it definitely felt quieter but unfortunately that carried through into September. There would sometimes be a bit of a burst again but it is at a steadier level. It’s not worrying but things have definitely slowed down a little. “That is also down to there being a lot more timber available in the market place. There is a lot more imported material, which guys are keen to get moved off docks and quays and that is obviously affecting things.” A fencing and pallets specialist agreed that fencing demand has eased, adding that “customers are wary of buying dear stock and then prices dropping”.
Another fencing and pallets specialist acknowledged that fencing prices had fallen but was anxious not to start a panic. Fencing prices going into October were “just about holding but under a slight bit of pressure, with some prices coming off”, he said, adding that his mill hadn’t dropped prices yet [in October] but might have to in November if they had to follow what everyone else was doing.
One unanswerable question he posed was “how much of next year’s garden sales and decking sales were bought during the pandemic this year?”. Merchants selling to the public, who are now diverting their spending to their social lives rather than on their gardens, might be less busy with fencing sales, while the contractor would be as busy as the housebuilders are and the fencing manufacturers will be trying to build stock. “If you are dealing with the likes of B&Q you have to have stock on the ground,” he said.
The retail/DIY side of garden product sales had tailed off, agreed another contact, but trade accounts still indicated “a lot of positivity going into next year”.
On the subject of production output, one
sawmill TTJ contacted had been working overtime all year and doesn’t see that changing, while others are working their normal hours. All are flat out, however. Demand was such in Q4 2020 that mills were unable to build stock and that situation looks to be replicated this year – although fencing may be the exception. “There won’t be any stock at the end of this year,” said one sawmiller. “Demand won’t allow it. We have had a very steady work in progress stock over the last 12-18 months and have hit that sweet spot that suits us and works very well with the mill.” “Because the fencing market has slowed down a little we will have some opportunity to build stocks of sawn and round fencing,” said another contact. “But I can’t imagine we’ll have any stocks of construction material.”
One factor to bear in mind, said a major sawmiller, is that two years ago some in the trade reduced their sawn timber stocks “almost to nil” and that when the demand surged last year they were in trouble. “Not only did we have to supply a huge
market but we also had to replenish the stocks that they let down two years ago,” he said. “There are two markets going on there at the moment, with one willing to carry more stock so that when March or April comes next year they will be ready.”
A fencing specialist reported that his October order book was full but a number of customers hadn’t bought as much. Some are reducing because they’re waiting for prices to fall further, while others “are reducing because they didn’t have as good an August and September as they thought they would and they might not have any space left in their yard. But they could get caught out. We could have the mother and father of all storms in January and all the fences that were put up could come down.”
While Covid, Brexit and felling licence delays have all been navigated by Ireland’s timber sector, another challenge that remains is the shortage of HGV drivers and the hike in haulage costs.
£10/m3
One contact cited a “minimum increase of ” for haulage, which had to be passed
on to the customer, while another referred to a rise of “30% on average”.
One sawmiller said his two-day turnaround in the UK had gone up to anything between 5-10 days as a result of the driver shortage, while others said they hadn’t had any problems getting loads out to customers. However, said one contact, there shouldn’t be any “over optimism or complacency”. “We are hearing that several of the large haulage companies have up to 10-15% of their mobile fleet parked up because they can’t get drivers,” he said. “That is the scale of the driver shortage.” ■
www.ttjonline.com | November/December 2021 | TTJ
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93
