Wood Products Prices in The UK
16-29 Feb.  2004

【Feb. 2004】

Report from the UK 

On the whole prices remain steady with currency fluctuations playing tricks with international trade price levels. The weak dollar is to down to an 11 year low against the pound sterling, but it is not all bad news as far as importers of timber priced in dollars are concerned.

 Over the next months a leading house builder is expected to join the FTSE 100 Index if the demand continues as is, pushing profits up about 30% last year. House prices continue to climb despite interest rate hikes by the Bank of England. The annual price increase on housing is reported as up from 14% in January to 17% in February.

 The latest monthly growth figures for the manufacturing and service sectors, due out in early March, are expected to show the economic recovery is still on course with unemployment continuing to fall.

Log Prices in the UK

UK Sawnwood Prices  

 Plywood and MDF in the UK  

Report from Holland  

 
All based on container shipment at US$2050 per G.P. 40 ft. box. Freight variation for buyers account. Merbau shipment is now based on container loading due to the hugh breakbulk freight increase of Malaysian Ringgit 80/ton.

Meranti and Merbau

The Meranti/Merbau market in Holland is far from active and the landed stock is said to be more than enough to serve the current slack demand. Traders are very eager to get some parcels sold and are very aggressive in seeking orders; the end users just sit back and watch the importers lower prices to get their attention. This style of trade has led to further price-erosion.

Importers, of course, also try to make the best out of it by offering very sharp prices without mentioning what the buyer will get. If the buyer asks for 3x5" DRM usually the seller bases his price calculation on the basis of Indonesian Bukit which is cheaper than Malaysian Bukit so that the low price level is laid on the market.  This leaves those with the higher priced Bukit no chance of a sale. Also, if the buyer does not specify the lengths he requires he will almost always be offered Indonesian Bukit over Malaysian timber.

As long as Indonesian Bukit is circulating in the market (especially in unsold positions) it will be difficult to break the vicious circle; the cheaper Bukit, in fact, fixes the price level for the more expensive Dark Red Meranti.

Thanks to the very low price for Dark red Meranti in the market there is hardly interest in sawn  Sapelli.  Analysts say that Sipo and Sapelli sawnwood is now moving so slowly that the CNF price levels for Mahogany in typical Dutch sizes are also beginning to ease.

In contrast to what is seen happening in the Dutch market (prices under downward pressure) it is reported that in Malaysia the export CNF Rotterdam prices are firming. Several items like strips and Nemesu are in short supply. Even in the most important size for the Dutch market i.e. 3x5" in DRM (Seraya and Bukit) importers see that export prices are shooting up and there is still not much timber to be had as exporters in Peninsular Malaysia do not seem to have a big unsold position.

Merbau, it seems, is virtually sold out, for immediate shipment anyway and traders say there is hardly a parcel available. For shipment in July/August and onwards some smaller parcels can be secured but, judging by the low log inventory in the sawmills and taking into consideration the long seasoning and kilning time for Merbau, analysts foresee that the availability of Merbau will be difficult throughout the year.

Traders in Holland are keeping a close eye on the situation in Malaysia and are aware that the hardwood supply situation will become increasingly more difficult as stringent controls on logging, are enforced and as efforts to tackle the illegal timber issue begin to deliver results. As some traders point out the best thing they can do is to make a concerted effort and work for better sales prices locally in support of the efforts in the supply countries.

 Source:ITTO