The general economic slowdown in 2023, following the post-pandemic bounce back and home improvement boom of 2021-2022, saw UK imports of US hardwoods contract.
But the latest trade update from the American Hardwood Export Council (AHEC) reports that the country remained by some way the US hardwood sector’s leading European market.
Total American hardwood lumber exports to the UK last year were down 22% to 107,000m3, but that was more than a third of all sales to Europe as a whole and export value fell less sharply, down 15% to US$76.8m.
In terms of species, UK red oak imports were only down slightly in 2022 at 5,700m3. White oak still accounted for the lion’s share of UK US hardwood imports at 51,100m3, but this total was 30% lower. Tulipwood imports fell 20% to 27,800m3 and walnut 16% to 8,400m3.
The US hardwood industry’s largest UK customer is the joinery sector, says AHEC, from bespoke furniture manufacturers, through retail fit-out, hospitality and office interior specialists. Despite other sectors falling back, joinery producer customers broadly are reported to have kept ticking over, with some looking at positive order books for 2024. One part of the industry, staircase manufacturing, however, was hit by the construction slowdown through 2023.
Generally though, UK importers told AHEC that, although the market was down on 2021 and 2022, the comparison with pre-pandemic years was more favourable.
Going into 2024 they said stocks, bought at firmer prices, remained too high, and this was leading to price cutting, with some businesses liquidating stock at prices that don’t reflect replacement costs. But there were also reports of trade trending upwards in the first quarter, albeit that the improvement was gentle.
As, in the words of the EC Economic Forecast’s latest report, the EU’s ‘economic expansion came to an abrupt end’ in 2023, following two years of strong growth, US sawn hardwood exports to Europe as a whole contracted 36% to 311,500m3, while value fell 32% to US$228.8m. That was nearly equivalent to export levels of 2020, but down 7% on 2019.
As in the UK, across Europe white oak remained the principal US hardwood import, but at 137,700m3 the 2023 volume was down 42%, with sharp declines in Germany, Italy, Spain, and Norway.
The market was also reported to be impacted by supply side issues, with importers saying white oak had become more difficult to source as mills, facing falling export and domestic sales, cut back output, while at the same time diverting timber to China and the buoyant US barrel stave market. Prices consequently bounced back after falling sharply in 2022, but European importers, facing fragile demand, were cautious about passing those increases on and were said to be sitting on the fence on procurement.
The latest trade figures show US red oak lumber exports to Europe in 2023 were down 39% to 42,700m3. However, AHEC says, this fall may be exaggerated due to a statistical error which inflated red oak exports to France in 2022. Excluding that, the 2023 decline in red oak to Europe was more like 25% in 2023.
Interestingly, hardwood traders in Europe also reported that more of their customers who had switched to red oak from white because of the widening price differential were staying with the former. End users, they said, had discovered red oak’s potential and regarded it as an “ongoing option regardless”. An Italian importer said this year that “white oak has virtually disappeared from the Italian market and has in large part been replaced by red oak”.
Exports of tulipwood lumber to Europe in 2023 were down 23% to 65,600m3 comprising 21% of total US hardwood sales to the market. While demand fell sharply in Germany and the UK in 2023, however, it proved more resilient in Italy and increased in Portugal.
US ash lumber exports to Europe fell 41% to 25,700m3 in 2023, with a particular dip in demand in Estonia where much of the timber has been destined for one of the largest thermal modification plants in Europe. The 2023 downturn came after a hike in Estonian consumption in 2022 when the war in Ukraine cut supply of ash to the country from Ukraine itself, Belarus, and Russia.
Exports of US walnut lumber to Europe fell 33% to 18,500m3 in 2023, with the sharpest decline being sales to Italy due to it furniture sector downturn. Supply-side trends were also reported at play here, with European importers saying walnut was less readily available, and prices were up.
Among other US hardwood species exports to Europe in 2023, hickory was down 39% to 4,800m3, cherry 50% to 800m3, and red alder down 75% to 800m3. Maple exports declined 11% to 3,900m3. But there was a 75% increase in exports of “not elsewhere stated” species, to 10,900m3, largely due to higher volumes going to Germany.
Against a backdrop of slowing global GDP growth, the US hardwood sector in 2023 also saw a wider decline in demand across the international market. Exports to north-east Asia were down 31% in volume to 65,400m3 and 36% in value to US$61.8m, while those to south-east Asia fell 17% in volume to 395,300m3 and 33% in value to US$203m. Exports to China fell 11% in volume and 19% in value to 984,400 million m3 and US$687m respectively.
Overall exports, primarily in grade lumber, were down 19% to 2.7 million m3. US domestic grade lumber consumption across the four main markets (cabinets, flooring, furniture, and millwork) was down too, hitting a record low of 3.89 million m3.
As for industrial lumber, demand from the US pallet sector fell 20% to 6.37 million m3, while consumption in the rail ties and road/mat timbers markets was up 4% and 8.2% respectively to 2.03 million m3 and 710,000m3.
