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extended further too, with the fuel crisis adding to long-standing infrastructure and wider logistics issues.
Because of the lead times, said one importer, “there’s a lot of price inflation yet to hit the UK market”.
Two other importers repeated views expressed in our last hardwood report (TTJ March/April 2022) that African inflation was exacerbated due to lower volumes of the UK’s favoured species, sapele, iroko and utile, coming out of current harvesting areas. An importer-distributor said they weren’t yet experiencing this issue with sapele. “We’re finding iroko and utile harder to find, but we’re one of the bigger sapele buyers and have a good programme with mills and good volumes going forward,” they said. “That said, we have to get ready for reduction in sapele at some point, for us it’s just not yet,” they added.
At the same time there still seems to be little switching to secondary African varieties. “End users are still reluctant to change,” said an importer-distributor, adding that what might give lesser known species momentum is development of engineered products – such as laminated and finger-jointed sections – at
source. Currently they offer engineered sapele, but it’s produced in Malaysia. Various issues were highlighted with supply out of Asia. Availability of Malaysian certified was reported to have reduced due to PEFC suspending some concession’s certificates and production and logistics problems resulting from the pandemic seem not wholly resolved. Reflecting this, some prices have been fluctuating, with Indonesian decking, for instance, reported to be “up 3-4% then down the same”.
The positive news is the reduction in container costs out of Asia. At their 2020/21 peak they were reported at US$16,000- $20,000, compared to US$2,500 pre-Covid, and they’re now said to be around US$4,000- 5,000. “Meranti prices are reduced due to our freight costs being down US$7,500 per load,” said an importer.
The latest ITTO Market Information Service newsletter reports a jump in UK tropical hardwood imports in the first five months of 2022, up 34% to US$711m (see pp62-63).
One importer-distributor said their sapele imports were up around 69%, attributing this in part to a shortfall in supply of modified
Accoya, while an importer put tropical growth down to a post-Covid “catch up on orders and falling freight rates”.
Demand for modified timber this year to date is reported as robust, but with constraints on production at Accsys UK, due to work to increase output, limiting growth in Accoya sales. “We could sell 30-40% more if we could get it,” said an importer-distributor. Interest in engineered hardwoods, including temperate, African and red grandis, is also said to be growing. As for the market outlook, the consensus follows the view of the importer quoted above; the next year will be challenging. “It’s so far so good this year, but it’s hard to be optimistic about the UK economy,” said an importer.
An importer-distributor agreed the future looks testing, but said the hardwood sector is better placed to weather a downturn than in previous economic crises.
“Businesses have been enjoying high prices and windfall profits for a while, so they’ve got a buffer,” they said. “It may not be easy, but provided prices don’t collapse, if volumes go down a bit, we should still do OK.” ■
www.ttjonline.com | November/December 2022 | TTJ
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