Wood Products Prices in The UK & Holland

16-30th September 2005

Report from the UK

House price growth continue to slow

The growth of annual house prices is continuing to slow according to the Nationwide Building Society (NBS). Prices rose by just 1.8% during the twelve months to September, the lowest increase since May 1996, but NBS think that the 0.25% cut in interest rates might now boost the market. The average cost of a UK property is now at £156,517. 

On 28 September the Financial Times Stock Exchange index recorded the highest level in six years, despite the government’s admission that economy growth this financial year will be considerably lower than forecast at the time of the budget early this year. The financial sector now looks forward to the mid‑year financial statement in November with trepidation. Some analysts forecast higher taxes next year. 

Although public finances were healthier than expected last month, some analysts think that the Chancellor of the Exchequer is heading for a significant borrowing overspend. At this time of the year, all the political parties hold their annual conferences prior to the reconvening of the Parliament in November.  

The furniture industry in the doldrums

The furniture industry continues in the doldrums with more companies going close to bankruptcy.The building trade sector reports that unlike a few years ago when more houses were being built, demand now exceeds supply resulting in rising profitability for builders. 

Prices for tropical hardwood are beginning to edge up as transport charges take their toll, but a comparison of the import statistics for the last three years shows that demand continues to decline. 

Log Prices in the UK

Sawnwood Prices in the UK

*When last available

Plywood and MDF in the UK

*When last available 

Report from the Netherlands

The new Parliamentary Year in the Netherlands has begun. The Government presented the ‘route map’ for 2006 under the assumption that the economy will improve next year. However, there is uncertainty in some quarters due to weak purchasing power, higher energy costs and concerns over the new health insurance system which some see as costly. After the rejection of the EU constitution, some thought that the country’s contribution to the EU would be reduced. Netherlands is one of the biggest contributors in the EU in per capita terms. However, it seems that next year, the country’s contribution will increase from euro 250 to 300 per capita. 

A lull in the timber market

The economy uncertainty is reflected in various trade sectors, including the timber market. The market for Asian hardwoods, in particular, remained more stagnant this year than anticipated. The market for tropical timber and in particular for dark red meranti remained quiet in the second half of September. Buying activity is very low and efforts are more aimed to further reduce landed stocks rather than taking further position and buy fresh parcels on CNF Rotterdam-basis from exporters in Peninsular Malaysia.

Stagnant demand for merbau

Merbau was hardly in demand in September. Some analysts think that the current price-level for Merbau is largely a handicap. Merbau is often traded in peaks, that it is not traded steadily throughout the year. The long spell of 8-9 consecutive months of business activity since September last year was highly unusual. During those months, substantial volumes of merbau in various sizes changed hands. Therefore, analysts do not expect a sudden revival of business on short notice given the current quiet market situation. Hopes are now place on early spring for more interest in the market.

Sawnwood prices in the Netherlands

1 ton of 50 Cu.ft. = 1.416 m³; PHND= Pin hole no defect grade. 

Sapupira sawnwood competes with DRM

The Netherlands also imports sapupira sawnwood (or Angelim pedra, Hymenolobium petraeum) from Brazil, KOMO standard (KOMO is a quality standard for the Dutch building sector). The timber is mainly bought in air dried (AD) condition and the process of kilning takes place in custom kilns in the Netherlands. The main size of interest is 3x5” in competition with dark red meranti (DRM) from Malaysia. Prices for this product are included in the MIS Report for the first time. 

The advantage of Sapupira is that it can be obtained FSC-certified (although in limited quantities), while DRM is only available MTCC‑certified or non‑certified from Peninsular Malaysia. Unfortunately, there are supply and delivery problems in Brazil leading to delays in execution of orders which may hinder future negotiations. Non‑certified Sapupira is normally available in reasonable quantities. 

Okoumé plywood prices

Tropical plywood manufactured in non‑tropical countries such China and Morocco are competing fiercely for market share in Europe. The MIS Report introduces here the prices for these products. 

Okoumé plywood prices in the Netherlands

KOMO is a quality standard for the Dutch building sector.

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'  Tropical Timber Market Report