With the end of 2004 proving to be a reasonably busy time for the UK hardwood trade, interested parties could have been forgiven for hoping that the new year would start with a bang. In the event, the majority of companies contacted in the first full working week of 2005 were disappointed at order volumes, with many pointing to the fact that many key consumers had made significant purchases ahead of the Christmas break and/or took off additional time. Several reported a brisk trade in smaller volumes for immediate delivery, but most remarked on a lack of substantial forward business.

Of those UK hardwood concerns celebrating a relatively good start to the year, a spokesperson for one said: “A lot of buyers’ companies were closed in the first full week of the year but order intake was good.” And enquiries remained good in the following week, “possibly because importers had anticipated a slow November and December, and were underbought,” he added. “We have seen demand across the spectrum, but particularly for North American hardwoods.”

While playing down the importance of commercial concerns at such a time, several contacts were pondering the potential impact on the hardwood sector of the South-east Asia tsunami disaster. While the tsunami is not thought to have affected hardwood production to a major extent, it was widely suggested that the massive reconstruction task that lies ahead could pull in vast quantities of raw material otherwise destined for export.

Meanwhile, a pre-Christmas jump in sales of Far East dark red meranti has been attributed to a sudden shortfall in supplies of framire – notably of the thicker sizes – owing to renewed unrest in the Ivory Coast. However, meranti prices have remained relatively stable over recent weeks, coinciding with a calmer period for freight rates.

Keruing in short supply

Keruing remains extremely difficult to source, not least because of monsoons in some areas of the Far East and because demand for logs from the plywood sector has been denying sawmills a substantial proportion of their raw material. Plywood producers in China have been particularly strong buyers, it was suggested this week. “If we had the keruing, we could sell it,” one company told TTJ. Above all, the UK market is “screaming out” for thinner sizes, it added.

Over many years, keruing has carved some well-established niches for itself, notably in the trucking sector. However, concern that ongoing problems in sourcing material are unlikely to ease in the short term has been leading “some large consumers to look at alternatives”, TTJ was told.

As mentioned earlier, the Ivory Coast appears to have entered a period of renewed uncertainty and, according to regional experts, the country has been the focus of “patchy” log availability and production disruption, all of which has led to “intermittent” supply problems for UK importers. According to one expert, framire prices “shot up” towards the end of last year, but “a large quantity was bought just before Christmas and so the market has settled down again”.

As for other West African hardwood species, sapele is enjoying reasonable availability and prices are understood to have remained relatively stable either side of the Christmas period, although one contact bemoaned “some very cheap ex-Continent prices” from sellers who were possibly “over-stocked in certain sizes”.

By contrast, supplies of iroko from the region are insufficient to meet demand and, as a result, prices remain “incredibly high”. Asked whether this was prompting users to switch to alternatives, one contact responded: “It is maintaining its market. It is a very user-friendly timber for which there is no simple alternative.”

Wawa is relatively cheap by comparison and producers in Ghana are understood to be trying to push prices higher to help compensate for a decline in volumes of other, more lucrative hardwood species.

The overall competitiveness of West African hardwoods has not been helped by the fact that, for historical reasons, African markets tend to be linked to the strong euro whereas other leading hardwood regions of the world trade in the weaker US dollar.

US white oak price firms

Moving to the other side of the Atlantic, prices of North American white oak are understood to be firming on the back of a shortage of supply. There is understood to be a particular lack of 1.5in and 2in material in the US itself, although no major gaps are apparent as yet in the UK where the thicker 2.5in and 3in sizes are often the most difficult. Some renewed firmness was also predicted this week for hard maple on the grounds that a relatively mild winter has led to muddy conditions and therefore logging difficulties in some areas. “Every time we go back for another box, the price has gone up again,” TTJ was told. However, a regional expert suggested supply was likely to be adequate to satisfy UK demand.

The cherry and black walnut markets remain relatively firm and are the focus of a decent level of enquiries, but ongoing weakness is reported for tulipwood. It is thought that the ash price may weaken in the near term as part of a bid to clear some of the reasonably high stocks that have accumulated in the US. Meanwhile, red oak appears to have achieved a reasonable balance between supply and demand.

Wood is emerging from South America although the flow has been restricted by a combination of factors, including the effects of rain on logging activities, a lack of money for putting logs into stock, strike action, and delays at ports linked in part to the soya season. A number of UK hardwood specialists noted that cedar was coming through but that they “could sell more” if supplies were easier. Noting that cedar had developed a niche following among some of the UK’s joinery manufacturers, one trader said: “These companies seem to be busy at the moment and so demand is good.”

South American species

Increasing UK interest was also reported for some of South America’s secondary species such as ipe and garapa, notably for use in the decking market. However, the same species are also attracting strong demand from, in particular, the French and the Americans.

The UK-based trader who booked a couple of boxes of Brazilian mahogany during last summer is still unsure whether he will be successful in securing the material. As previously reported (TTJ October 30/November 6, 2004), some old stocks of Brazilian mahogany were understood to have gained approval for shipment, although US buyers were favourite to snap up any available supplies.

As for eastern European hardwoods, a degree of “turmoil” has been reported in the birch market because “the bigger plywood producers are prepared to pay more than the sawmillers for the logs”. According to several contacts, some buyers have been looking to alternative sources of supply such as Finland and Canada. Meanwhile, European oak is said to be attracting renewed interest. “It is well-priced, and the fact that it is a temperate and traditional timber is adding to its appeal,” said one source.

As they embark on this year, the majority of UK hardwood specialists were undoubtedly pleased to see the back of 2004 – a year dominated by supply difficulties and generally lacklustre demand in the UK. Few hold out the prospect of a major shift in fortunes for 2005, although several contacts contended that an early general election could help to reinforce business confidence.