Wood Products Prices in The UK & Holland

1-15th December 2005

Report from the UK

The trade pins hopes in 2006

After an unexciting 2005 for the timber trade, the hardwood trade hopes that 2006 will bring positive developments for the sector. Otherwise, 2005 brought other developments such as natural disasters, some of which will inevitably have an adverse effect on the tropical timber trade; a failed EU Constitution; contentious EU budget discussions; lengthy Doha talks; and the re-election of the Labour Party, among others. The next twelve months in the UK will be politically interesting, but for the timber trade it remains to be seen. The construction industry have closed down for Christmas break until the 3rd of January. 

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

 Gerutu sawn buyers to wait till March 2006

Some importers report that the continued supply disruptions in Brazil affecting the Dutch market do not only result from crackdowns on illegal logging and slow issuance of export licences, but also from strikes and bad weather conditions. As previously reported by the MIS, this has generated pressure on Malaysian sawnwood such as gerutu (as a substitute for cambara), which, according to several leading Malaysian exporters, is now sold out. It seems that buyers of gerutu sawnwood must wait until early March 2006, when sawmillers in Peninsular Malaysia return after Chinese New Year. 

Selagan batu also in acute shortage

Selangan batu sawnwood, which was supplementing the short-supplied Brazilian massaranduba (Manilkara bidentata ), was also in acute shortage, according to sources in Sabah and the Netherlands. Massaranduba, good for anti-skid decking use, is slightly cheaper than selangan batu but its current supply is very limited. 

Iroko sawnwood regaining market share

Besides Brazilian sapupira, Brazilian tatajuba (Bagassa guianensis) is also found in the Dutch market. Tatajuba belongs to the same botanical family as iroko (Moraceae) and is used for similar applications, but the former is said to have a slight cross-grain and be slightly less stable than iroko. Nonetheless, both are durability-class 1 and KOMO-approved for exterior use. Tatajuba is fairly available. 

However, demand for tatajuba has declined lately due to a recovery in the supply of iroko from Africa at very attractive prices. Until mid-2005, iroko was only available at high prices, which created good opportunities for tatajuba. Now, iroko is gaining some market share at the expense of Brazilian tatajuba and jatoba and Malaysian merbau. 

Iroko 7/4x12” (inclusive of shipping cost and kilning cost) is roughly $100 per ton cheaper than merbau KD. As a result, and after strong trade during the second half of 2004 and the first half of 2005 when merbau prices reached historic highs, Dutch demand for merbau sawnwood is rather dull. Landed stocks of the product are reported as sufficient for coming months.

Slow demand offset by disrupted supply

Trade in dark red meranti (DRM) sawnwood was very slow prior to the Christmas break. However, the stagnant Dutch meranti market is offset by the disrupting supply situation in Malaysia created by wet weather. In spite of unsold stocks in typical Dutch sizes, exporters are refraining from placing supply offers in order to hold DRM CNF price levels firm for both DUC (Dark Uniform Colour) and PHND (Pin Hole no Defect) grades. Experience shows exporters that demand should pick up next spring. This is reinforced by the recent devaluation of the US dollar with regards to the euro. Meranti, which is quoted in dollars, would soon be more competitive in euro per m3 CNF landed should the devaluation continues.

Weak dollar would make DRM more competitive

However, sales prices for DRM sawnwood, particularly dimension 3x5”, in the Dutch market remained under pressure. Price discounts continued, but failed to increase turnover. Sapelli has an edge over DRM in pricing. Sapelli 3x5” is quoted at euro525 per m3 FOB or euro 640 landed & kiln-dried, compared  with DRM 3x5 PHND at around ?656 per m3. But if the dollar weakens further in the next weeks, DRM and Brazilian timbers would be more competitive provided enough supply. Furthermore, there are unconfirme d reports that sapelli log prices may go up soon early next year. Some analysts think China may re-enter the market, which could increase the price for square-edged sapelli. 

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

KOMO is a quality standard for the Dutch building sector.Surcharges for water-based primer coating, 2 layers both faces 80μ dry (euro/m2): 4.3 in Holland, 3.8 in France 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