The UK and Irish markets for American hardwood lumber grew in 2006 with increases of 6% and 28% in volume respectively. The total value of these two markets to US exporters of all forms (lumber, veneer, logs and so on) was more than US$140m.
Sawn hardwood lumber exports by the US to the UK worth almost US$80m accounted for three-quarters of the total import of American hardwood products – including veneer, flooring, mouldings and logs. White oak accounted for 37% of the lumber shipped, followed by ash 9% and tulipwood (yellow poplar) 7% in value. Cherry, maple and walnut were the other three main species at around 5% each. Main movers in the UK market by volume, when compared to 2005, were tulipwood up 12%, white oak up 8%, walnut up 6% and maple up 8%. Walnut logs increased by 37% in volume and 50% in value, reflecting sharply higher prices for a species under strong global demand.
In Ireland, white oak lumber accounted for 57% of the volume and 51% of the value of direct shipments, although total consumption has to take into account additional deliveries to the Republic from stocks landed in UK. Ash was the second species also in the Irish market, which was worth US$33m in direct shipments during 2006 (an increase of almost 20% on 2005), of which sawn lumber was US$28m.
Average price
The average price paid by UK importers in 2006 for all US hardwood lumber was US$749/m3 and even higher in Ireland at US$809/m3 against an average for the EU of US$696/m3, making both markets a continuing priority for American shippers. The differential is partially explained by species mix and thicker specifications, but many importers report an increase in quality demands, which is a significant and apparently ongoing trend.
In both markets AHEC has been strongly promoting red oak with new advertising, a dedicated website and focusing on the species at seminars and exhibitions. However, the effects did not show up in 2006 and specialist importers remain sceptical. One predicted that only a serious shortage and/or severe price rise in other oaks will stimulate British users to accept red oak.
However, by early 2007, the price of 4/4 white oak No 1 Common KD was said by one importer to be about 25-30% higher than 4/4 red oak No 1 Common KD. And, US shippers pointed out that, more importantly, everyone in April was oversold or at least sold out in white oak, which is only a small (and getting smaller) percentage of the oak cut. Red oak is readily available and by far the dominant oak species found in eastern US forests.
Any analysis of what drives this sector of the hardwood trade depends on an understanding of the different applications for which US hardwoods are imported. Given the demise of mass production of furniture in the UK, estimates vary, but a consensus puts furniture now at only 20-30% of the market.
Flooring
Flooring consumption is similar. While there are many American species suitable for flooring, there are no significant producers on a European scale in the UK and most installations use imported product. Bespoke and small-scale production of flooring probably accounts for less than 20% of consumption of imported lumber. This leaves joinery and interiors at 50-60% of consumption. Because of the high proportion of products for these sectors being sold through merchants to a multitude of users, it is difficult to assess the split between them. But, driven by the strength of construction across Britain and Northern Ireland, importers and distributors report brisk business for joinery products in the first quarter of 2007.
The Irish housing sector is now cooling, but pundits are expecting a “soft landing” rather than a crash and starts this year are still expected to exceed 80,0000, providing healthy enough joinery demand.
Whatever the case in the short term, with hardwoods used by the finishing trades in construction projects and fit-out lagging behind housing starts, current consumption levels should at least see out 2007 in both the UK and Ireland, whatever happens to a property market now regarded by many observers as close to its peak.
Species trends
Species trends are very clear. Oak now represents nearly 60% of all hardwood flooring in Europe. It is the leading joinery timber in UK and Ireland and is now available from Europe certified to either FSC or PEFC.
So, the question arises as to where American white oak fits into these markets, given that so little is currently available certified. Its consistency of colour, grading and shipping, provide reliability that is not always matched by its competitors. So far in 2007, despite some shortages of both American and European oak, dry and ready to ship, the trade is reported as brisk.
Ash and tulipwood are both selling well. Ash is readily available in a range of thicknesses and is enjoying improved demand. Tulipwood is an easily painted hardwood and has become a workhorse species for furniture as show wood. Cherry and, to a lesser extent, hard maple have fallen from favour and demand is subdued.
The British and Irish economies and construction industries will hold the key to consumption of US hardwoods for the rest of the year so long as there are shippers ready to ship.
