Bust the Boom – the timber industry needs serious adjustment to ‘dilute’ what is the inevitable
Think longterm, work collaboratively and don’t be greedy.
Wise ‘idealistic’ words but the reality is the timber industry is under significant pressure and it has got very ugly due to many reasons we are all aware. Wet weather, Covid backlog, fires, hurricanes, the US, China (both paying top dollar), India (lesser quality requirement) purchasing like there is no tomorrow and a general lack of trees lest not us forget! The upsurge in home improvement has also increased the usage of timber being stuck inside climbing our walls. Prices have sky rocketed up to 180% (depending on which region) and the cost/availability of logistics is a major component to add to the sheer pain of securing timber. In fact most building material prices have increased rapidly. Securing constant quality supply of timber (on regular contract) is incredibly challenging and whilst some will be able to purchase at better prices than others it probably won’t be of significant volume.
Timber industry professionals know the boom time will end and it may well crash very badly. We have been here before and with trading conditions very similar as the first half of 2007. Huge shortages, making the news in the UK press where people in the UK were even having the fences stolen! Then September 2007 the US announced their Sub Prime mortgage market was collapsing. The lights went out almost instantly in the timber trade and 2008 was obliterated. A total collapse with timber being traded at £90m3 to clear inventories. Market’s go up and do down it is only a matter of time.
Consumption of timber outweighs supply
Meanwhile the US and other countries paying big bucks for timber with their housing boom leaving the UK to fight over the scraps some may argue, securing a constant large volume supply of C24 Carcassing material has become impossible for most. There is of course huge opportunity for Russia to export to the UK, with a few tick boxes to tend to including reliable ‘Chain of Custody’, acceptable reasonable payment terms, continuous reliable quality supply on a contract basis and a willingness to export amongst the 300 FSC listed accredited saw mills. A large majority will not have experience exporting and some are not exactly super excited right now by the fact they will sell cheaper to the UK albeit many from our industry would argue a more reliable and loyal market place to do business and a great market to build up for decades to come. Canada feeding a ‘very hungry’ China and Japan and only a small amount of timber going to the UK. Stringent environmental requirements & policies have had a huge impact on the industry to add to what could be melt town. Consider Ireland alone, globally the focus towards sustainability has increased embracing environmental policies demanding usage of more forest products for fuel, construction etc.
There are so many global factors are all coming together to create this demand
So whilst there is what ‘some’ would describe as significant price gauging those that hold large stock amounts and importing ‘day in’ and day out’, thinking very much longterm and genuinely support their clients will no doubt survive. Prices are increasing still, and will continue to do so. Merchants/buyers/retailers have memories like Elephants and will no doubt feel they will have their day. What goes around comes around – but that’s life and indeed business and currently no one can control now the reasons that caused it.
Those veterans in the sector in UK have never ever seen anything like this in their entire careers. We as a nation are restricted by sizes for starters considering Russia alone are focused on 6 metre lengths and own 20% of the worlds forests. We need to be far more flexible, the inevitable to work to what the saw mills have to offer.
NO WOOD NO BUSINESS!