Pallet manufacturers can look forward to intense price competition among suppliers of sawn softwood, Dr Cormac O’Carroll, vice president of Jaakko Pöyry Consulting, told delegates to the TIMCON conference in London earlier this month.
Dr O’Carroll said that sawn softwood supply was set to easily outpace demand – despite a projected increase in sawn softwood demand from 30 million m³ to 55 million m³ by 2010.
Latin America and Oceania were moving from being net importers to major exporters of timber by 2010, he said. Elsewhere, eastern Europe, the Baltics and Russia were looking to ratchet up supply. Western Europe was likely to start exporting by the end of the decade.
‘What does all this mean? With no constraint to increased production and markets not increasing by as great a factor, there will be sawmill over-capacity, supply will exceed demand and there will be a downward pressure on prices. One thing is for certain, we are not going to run out of timber,’ said Dr O’Carroll.
‘This is great news for buyers but not for sellers,’ he added.
Russia is the lowest cost producer of material, according to Jaakko Pöyry Consulting, and the US the most expensive. The production cost index for Russia was 100 compared to 200 in the US. New Zealand and Finland’s cost index was said to be 160 and Brazil’s 110.
