News from the UK 

Log Prices in the UK 

  

UK Sawnwood Prices 

  

Plywood and MDF in the UK 

  

Report from Holland 

Up and down dollar 

During last March the dollar/euroexchange rate improved slightly as the dollar strengthened a little against the Euro. From an earlier level of around US$1,34 to the Euro the rate changed to about US$1,29 to the dollar after the latest interest rate increase in the US. This, coupled with the news of weaker French consumer spending and growing economic problems in Germany with a frightening prospects of even high unemployment and lower business confidence, dampened the Euro. 

The improved dollar rate, however, did not translate into an improved sales-price for Dark Red Meranti (DRM) 3x5" free delivered to end-user. On the contrary, the sales price remained extremely weak and is currently hardly at the stock replacement value.  

Under these conditions if there are buyers for 3x5" in PHND DRM outside Holland and outside Malaysia then hese buyers have better chance to get low priced parcels in Holland rather than in Malaysia!  

Demand for DRM in Holland remains pretty low, despite the fact that weather conditions, after the short interval of bad winter weather seen at the beginning of the month, are now favourable for the building sector. Yet analysts report that the building sector remains inactive a situation backed up by several timber traders. 

Building sector performance 

Figures from the Dutch Statistical Bureau show that the performance of the building sector in 2004 was better than in 2003, but only slightly with most of the improvement seen in just the first quarter of 2004. 

In summary housing starts were down 5% in 2003 on 2002 and just 0.1% up in 2004 with levels in the 3rd and 4th quarter of 2004 coming in at minus 1%. 

The problem say analysts is that the long running economic recession in Holland means people are less willing to invest and consumers are lacking confidence and unwilling to spend. Some economists say that there is a light at the end of the long dark tunnel as some economic indicators are improving but that with low consumer confidence and the continuing red tape choking the building sector improvement will be slow in coming. 

An example of the difficulties faced by the building sector is with regards to the further expansion of the rebuilding of homes in Rotterdam where plans were developed to create a second 'Maasvlakte' (Meuse-plain) port area.  

This important project has been stopped for at least two years because some say that the environmental issues have not been properly considered. In another example, a housing development on a former industrial site area has not got started even though the polluted soil has been removed and the area cleaned completely.  

In another area a project to build an industrial area has been halted because the area was thought to be the habitat of a rare rodent.  

In another case a proposed, office building in Hendrik-Ido-Ambacht was cancelled because residents complained it would draw more and this despite there been a highway nearby carrying  millions of vehicles annually.  

Some observers say that the building sector is suffering an avalanche of rules and regulations and if there are no existing regulations then civil servants in Holland or in Brussels will think of one. 

The fact is, say analysts, that it is extremely difficult to find a good compromise between housing development, nature and economic progress especially in a rather densely populated but small country like Holland.  

Malaysian supply 

Traders are reporting that the supply situation in Malaysia, for typical Dutch sizes, remains difficult. Overall Meranti is not in as an abundant supply as, for example, Nemesu, or Bukit. Most exporters report carry some unsold position in 3x5" but Dutch traders report that the volumes are not big.  

Malaysian sawmillers report that they are not in a position produce more Bukit, for example, and in such a situation they can demand higher FOB prices. The slow production of 3x5" in demanded length specifications creates problems for the availability of shorts and, no Indonesian timber being imported into Malaysia, everyone is seeing falling availability. 

Dutch traders are reporting that even in Sabah the Meranti supply is not so good at the moment. 

Merbau still remains in fair demand and overall the interest of importers for various sizes from the Dutch and Belgian market seems higher than can currently supply which is leading to further price increase CNF Rotterdam. Some Dutch importers wonder whether the ceiling has now been reached.