Wood Products Prices in The UK & Holland

1-15th October 2005

Report from The UK

Housing market boom may be over

House prices rose by just 1.8% in the year to September, the lowest increase since May 1996, according to the Nationwide Building Society. Consumers in the UK are possibly weighed down by the burden of servicing mortgages. Consumers have also started to increase savings. The saving ratio jumped from 4.1% of disposable income in the last quarter of 2004 to 5% in the second quarter of 2005. As a result, consumer spending (previously underpinned by a booming housing market) is not longer sustaining economic growth.  

Preparations for the 2012 Olympics begin

The planning for the 2012 Olympics in London is well under way. It is foreseen that fairly large quantities of timber will be required. Exporters have been asked to make sure that they are aware of any contracts that may come their way are fulfilled accurately. 

Lacklustre performance by the UK tropical hardwood sector

Two more medium sized furniture companies have reported poor results for the last financial year with little expected recovery until the first quarter of 2006. The TTJ reports that the UK tropical hardwood sector is lacklustre with stocks just about able to cope with the current demand. Exporters are keeping an eye on the developments, both political and economic, in the UK over the next few weeks, as there is a possibility of a major slow down. 

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

Sawn market remains quiet

The market for Asian hardwoods, in particular for dark red meranti, remained as quiet as in previous weeks. Locally there is certainly some demand and timber changing hands but the situation cannot be described as active. Due to the dull market, traders seem to be unable to get the price they want or need for the main size 3x5”. Competition is simply too fierce, there is often price debating in marketing 3x5” sizes. Sales prices, however, for odd and not overstocked sizes such as 1 3/4x12” and 4x5” score considerably better. This leads to importers showing more interest in replenishment purchases of such sizes rather than buying bukit/seraya in 3x5” CNF Rotterdam unless it is MTCC-certified for which more interest seems to be shown.  

FMU areas in Malaysia gain Keurhout approval

The renewed interest in MTCC‑certified meranti into the Dutch market coincides with the Dutch government approving an area of 4.4 million hectares in Peninsular Malaysia in which MTCC timber is harvested in forest management units (FMU)/Chain of Custody (CoC). A Keurhout Legal (KH-LET) certificate can be issued on timber from these FMU. The areas, managed by Malaysian State Forestry Departments, are in Permanent Forest Estates in Pahang, Selangor, Terengganu, Kedah, Perak, Negri Sembilan and Kelantan. For the Dutch market, the states of Pahang, Kelantan and Terengganu play an important role in the supply of timber.  

The Dutch Timber Trade Organisation (VVNH) had taken over the validation of certificates from the Keurhout Foundation on 1 January 2004 and the gatekeeper function that the Keurhout Foundation had since its founding in 1996. The area approved under the KH-LET scheme is very large and offers the potential to bring about a larger flow of certified timber. The condition for such growth is that all chains in the CoC are covered by certificates issued by an independent certifier and that all corresponding certificates are approved by the Committee of Experts in Keurhout. Only if the entire line, from tree in the forest to timber wrapped up for shipment, is transparent and found to be correct can Keurhout certificates be issued and approval be given in the Keurhout-Legal scheme.  

It should be noted that Keurhout’s ‘KH‑LET’ guarantees that timber originates from legal source. This is not to be interpreted as Keurhout’s ‘KH‑Durable’, which stands for approved ‘legal’ timber that is also harvested in accordance with strict criteria for sustainable logging/timber production. Presently six KH-LET certificates have been issued to companies in Malaysia, namely Mentakab Sawmill, United Trading, Pan Resources, Sim Seng Huat, Costraco and Lionvest. It is just a beginning and a small step towards more to come. The timber brought into the market by these six companies may only bear the KH-LET certificate if the timber is coming from the 4.4 million approved hectares and that the timber has passed chains (from logging to cutting and kilning) that are all approved by Keurhout.  

KH-LET logo               KH-Durable logo  

The KH-LET logo contains yellow ellipses, the word Keurhout in yellow and the stamp Legaal (see above). The KH-Durable certificate, which goes a step further, has a logo that contains green ellipses, the word Keurhout in green and the stamp Duurzaam.

Supply problems persist in Brazil

The supply problems in Brazil have continued. Crackdown on illegal logging and bribery-scandals has disrupted the export of sawn timber requiring stringent legal evidence that all licences to produce and to export timber are found in order by the Brazilian authorities. This has caused problems in the supply of species such as cambara, popular for strips and in the use of various types of mouldings like gutterboards, panelling etc. The supply of sapupira (both FSC and non-FSC) also remains difficult. Since the purchasing season of anti‑skid material is about to begin in the Netherlands, the lack of products of certain species such as Brazilian massaranduba will lead to further pressure on supply of bangkirai from Indonesia and selangan batu from Sabah. The supply in Sabah is not abundant either.

Sawnwood prices in the Netherlands

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

Okoumé plywood prices in the Netherlands

Surcharges for water‑based primer coating, 2 layers both faces 80μ dry (€ per m²): 4.3 in the Netherlands and 3.3 in China.

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