Wood Products Prices in The UK & Holland

16-31th MAY 2005

Report from the UK 

Over the next few months analysts expect the euro to continue to weaken against major currencies as a result of the 'no' to the EU constitution and this may result in changes in timber sourcing.  

In the UK inflation held steady at 1.9% during May and this is just below the UK government target of 2%. Any rise above this 2% level would likely result in further interest rate increases.  

Data just released shows that the UK economy grew more slowly than previously thought due to the continued fall in consumer spending.  Business investment also fell in the first quarter.  

A slow down has been observed in the all-important housing market but the sector is still in reasonably good condition.  

Log Prices in the UK 

UK Sawnwood Prices 

Plywood and MDF in the UK  

Report from Holland 

News on supply  

The availability of Dark red Meranti (DRM) and Merbau, in typical Dutch sizes, remains very low. Exporters, apparently, have little to offer CNF Rotterdam and certain sizes seem impossible to get.  

Now, shorts are all taken up by Malaysian factories for the production of finger jointed scantlings and traders say that strips are also extremely difficult to find now because the South African market is very buoyant and willing to take lower grades. 

Reports suggest that the Thai market is currently extremely keen on Merbau flooring strips (1x3") now that the supply of Merbau/Kwila from West Irian and Papua New Guinea is becoming more difficult. It is said that in PNG certain EU projects for production of 'green' timber intended for the Dutch and German market have failed. 

With Merbau in short supply in Peninsular Malaysia, traders report that offers from producers for various Dutch sizes, including the flooring strips/flooring boards 1x6-7-8", are few and far between and the CNF Rotterdam prices are still moving up. Also, the CNF price level for various Meranti sizes for the Dutch market remain extremely firm. 

The buying interest in Holland for 3x5", for instance, has been cool for several weeks and there are no reports of significant volumes in 3x5" being sold to Holland and yet prices for both Bukit and Seraya are holding firm. In the view of importers in Holland this demonstrates that the log supply situation in Peninsular Malaysia is indeed tight.  

Pilot C.o.C in Indonseia 

The Dutch Timber Trade Association (VVNH), has a clear stance on illegally harvesting and has recently undertaken a pilot project "Indonesia Chain of Custody and Legality" and is now piloting the verification process in some Indonesian mills supplying the Dutch market.  

The VVNH undertook a mission to Indonesia in March to set up a system. The initial feeling amongst VVNH members was that the mission's field study and their discussion with partner exporters was successful and the consensus is that it will be possible to get demonstrably legal timber from Indonesia. 

Abbreviations

LM       Loyale Merchant, a grade of log parcel	Cu.m         Cubic Metre
QS        Qualite Superieure	Koku         0.278 Cu.m or 120BF
CI          Choix Industriel	FFR           French Franc
CE         Choix Economique	SQ              Sawmill Quality
CS         Choix Supplimentaire	SSQ            Select Sawmill Quality
FOB      Free-on-Board	FAS            Sawnwood Grade First and
KD        Kiln Dry	Second
AD        Air Dry	WBP           Water and Boil Proof
Boule    A Log Sawn Through and Through	MR              Moisture Resistant
the boards from one log are bundled	pc         per piece
together	ea                each
BB/CC  Grade B faced and Grade C backed	MBF           1000 Board Feet
Plywood	MDF           Medium Density Fibreboard
BF        Board Foot	F.CFA         CFA Franc
Sq.Ft     Square Foot	Price has moved up or down

Source:ITTO