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customers kept buying,” said one. “Now we’ve got wood on the ground that is significantly cheaper than forward cost, but it’s still just dribbling out. The consequence, say US mills, is that European customers, including in the UK, are sitting on the fence and not committing. The trouble if we don’t commit is that we won’t have enough wood in Q1 2024.”
US walnut is also reported in tight supply, particularly higher grades, with prices up 10-15%.
US ash supply is said to be “under stress” due to the emerald ash borer infestation, but an importer said they could still get what they need and price is stable. Both US tulipwood and maple were reported as available, with prices steady and the same applied to cherry where one importer was actually seeing revived demand.
Importers are also buying more red oak. “It still lags way behind white, but some customers who switched to it in the pandemic due to the red/white price differential stuck with it,” said one.
African trade is characterised by “ridiculously late contracts”. Iroko and sipo are said to be “hard to find” and prices are firm, while framire, said one importer, has “virtually disappeared”.
Sapele prices are also firm despite sales slowdown. “There’s no sign producers are about to move on price, but if demand doesn’t rise, they may have to think again,” said an importer.
There are also reports of more uncertified sapele coming to market and undercutting certified, which may put added pressure on the latter’s price.
“Some people will trade in anything and uncertified is 15% cheaper than FSC,” said an importer-distributor. “Besides price, there’s a suspicion more of this timber is being shipped to Europe now due to implementation of stricter import controls under the EU Deforestation Regulation (EUDR) in 2025.”
There’s still only limited UK interest in secondary African species.
As Interholco reports in our tropical market focus, its laminated, finger-jointed products in lesser-used varieties, such as kosipo, bosse and wenge, are being widely taken up in Europe (see pp36-37).
“These engineered products, such as scantlings for windows and doors, appeal due to their stability and high yield and sell on technical characteristics rather than species name,” said Interholco’s Christophe Janssen. “But the UK tends to be more traditional on species and customers focus on these products’ higher initial price, despite the overall cost benefits.”
The prospect of Ghana finally starting to issue FLEGT licences next year for exports to the UK and EU is greeted as a positive, but
not with huge excitement (see p40). Pending a bilateral FLEGT agreement between the UK and Ghana, Ghanaian licensed products are set to be exempt further due diligence under the UK Timber Regulation and accepted as legal and sustainable in government procurement policy. In the EU, however, while the licences will be accepted as proof of legality, they will not be given a green lane under the EUDR, which requires additional proof products are not linked to deforestation or forest degradation.
“The UK imports relatively low volumes from Ghana,” said an importer. “And in the EU, with the replacement of the EU Timber Regulation with the EUDR, they’re a bit late to the party.”
Asian supply is reported as “uneventful”. “Freight rates are down to pre-Covid levels,” said an importer. “And prices of meranti drift up 5%, then down 5%. But for us it’s an increasingly fringe species. Sapele dominates general joinery demand.” Storm damage in Croatian forests is reported to be disrupting oak harvest, with some Italian exporters saying they may not be able to replace certain items once stocks are gone. But currently European oak availability is improved.
“In the last couple of years, suppliers gave us half what we wanted and were take it or leave it on price,” said an importer. “Now we’re back to normal. We can get what we want, have a haggle and prices are down 2-3%.”
An importer-distributor said beech was in demand and supply tighter, with some customers consequently switching to tulipwood as a paint grade.
Grandis/eucalyptus sales are reported to be relatively healthy, particularly in engineered form, while availability of Accoya, following reduced supply during expansion work at producer Accsys Technologies’ Arnhem factory, is improving. “We’re still 15% below where we want to be on supply, but we were 40% below,” said an importer-distributor.
Views vary on the prospective UK market impact of the EUDR. Some say they are not overly focused on it currently, others that it will inevitably have a knock on. “Our European suppliers will be affected as it applies not just to timber and other commodities being placed on the EU market, but also being exported from it,” said an importer. “And if it adversely affects suppliers elsewhere, that may have fall-out. Counter- intuitively, it may impact African suppliers less, as their export customers already require them to be belt and braces in terms of geolocation of timber origin, time of harvest and so on, which the EUDR requires. But for the US, with the fragmentation of forest ownership, providing geolocation information is a challenge.”
An importer-distributor felt the UK would ultimately align import regulations with the EUDR, but their hope was that the latter and any new UK rules would ultimately differentiate between sources of supply. “For some tropical sources, more challenging regulation is a good thing, but the disruption it could cause in the US, a demonstrably sustainable source of hardwood, is unnecessary,” they said. “I need mills to tell me the exact plot in the Allegheny my wood comes from? Seriously?”
Another importer said UK timber traders would also be impacted if manufacturer customers sold to the EU. “They will need us to provide the EUDR information,” they said. On the wider outlook, an importer- distributor felt the market had been through the worst and was becoming more stable, although some customers remained “reluctant to commit, in case a product is cheaper next week”.
Another predicted, with little prospect of significant economic growth, the industry would “cut its cloth accordingly”. An importer said they were currently getting paid on time, but reported anecdotal evidence of rising bad debt.
“So the outlook is uncertain,” they said. “But we’ve got to remain proactive and keep buying to have something to sell. You just take a big gulp and hope the market co- operates when the wood arrives.” ■
Above: White oak prices are up 80% PHOTO: AHEC
www.ttjonline.com | November/December 2023 | TTJ
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