The fencing market has been strong so far this year, particularly since March, according to one fencing and garden products manufacturer.
High demand has meant that production output has not dipped at all and stock levels are good both on site and out in the market place, they said. Stock building for the next season will begin in Q4.
Business has been brisk across both utility (lap and featheredge panels) and decorative fencing but particularly good in the latter.
“We’ve seen a particular trend towards more contemporary designs with simple straight lines,” said a spokesperson. “We also see a consistent pattern across our categories for a willingness to spend and pay for the higher quality versions of products in any given range and we think this is reflected in all outdoor product categories and is a consequence of the amount of exposure given to the benefits and attractions of improving and transforming outdoor spaces in the media.
“Trends for zoning and partitioning in gardens are also boosting demand for decorative panels.”
Prices have been “necessarily” moving up over the last 18 months, continued the spokesperson. “Long established price points are under pressure as cost in all parts of the supply chain have only increased in the last few years.”
That’s a view born out by primary processors who have had to deal with high log prices – although that is slowly changing.
“Log prices are coming down, albeit very slowly and in our view that is because fencing has been good for the first six months of the year,” said a processor. “The fencing mills haven’t had the same need to put downward pressure on log prices as construction timber mills competing with a glut of cheap imports have, so there has been a kind of two-speed log market.
“Fencing prices are starting to fall as we move towards the back end of the season and those mills are now having to pay catch up [to try to force log prices down].”
Incising has become mainstream and there is widespread availability of incised posts and sleepers. Sales of both have continued to grow this year, said a major sawmiller.
“I think a lot of builders’ merchants have decided that if timber is 20% of what they do and fencing is 5% of that, it’s not worth the hassle of selling a cheap [un-incised] post and having a customer coming back to complain because it’s failed.”
The market is so topsy turvey at the moment that it’s hard to put a figure on the differential between imported and domestic prices.
“As an example, I did a couple of quotes for fencing yesterday. I quoted the same price for both jobs and one I got and the other I was told I was out by £20/m3.”
Demand for pallet wood from sawmills was also strong for the first four months of the year, heavily influenced by Brexit stockpiling ahead of the original March 29 deadline. Pallet business continued to be “unexpectedly good” into May, said a sawmiller but June and July were a lot worse than expected. Prices for pallet wood are said to have fallen by 7-10% since the start of the year.
The likelihood of further stockpiling ahead of the October 31 deadline is very slim. “I think they have learned their lesson and I don’t think there will be stockpiling to anything like the same extent,” said a sawmiller.
“Also, there was a genuinely held belief in Q1 that there was a shortage of pallet wood and pallet manufacturers felt they needed to get their orders in quickly. That has now completely flipped over and there is plenty of wood available at domestic, Irish and continental mills, so they know they will be able to secure the material.”
In addition, storms and spruce bark beetle infestations in Germany have led to significant volumes of “prematurely felled” wood coming onto the pallet scene.
“We’ve seen some very competitively priced timber coming onto the UK market,” said a sawmiller. “I’m talking £30/m3 cheaper than domestic timber. It’s not like-for-like and is funny sizes and specifications but somebody in the market will absorb at least some of it and it will displace other material.”
Contrary to the view expressed above that stock levels in the market place are good, the sawmiller said he’d never seen stocks so low, across all products.
“The pace of price reductions is so quick that people are thinking ‘why should I commit to stocks for four weeks time when it is probably going to be cheaper by then?’ and they know that, whatever the product is, they can pick up the phone and get it from a plethora of suppliers.”
