In what has been a largely stable couple of months for the UK hardwood trade, many operators are preoccupied by the threat to supplies from unrest in the Ivory Coast. Rebel activity is said to be affecting some sawmills and to be creating problems with transport of logs in the interior of the country.
Wood has still been coming to the UK from the Ivory Coast “so any shortages won’t bite just yet”, TTJ was told this week. In the main, however, this is thought to represent material that was already at the docks. Reports suggest suppliers are reluctant to take on new business until the situation has returned to something like normality.
The impact of this unrest is likely to be felt several more weeks or even months from now. “If the situation carries on, I would expect shortages of iroko and idigbo in particular down the line,” commented a major importer. “It could give a fillip to a market that has been flat and quite hard work.” Another importer also expected the supply of idigbo to be the most affected. Meanwhile, according to an African hardwood expert, the prices of both iroko and framire were subject to a slight firming because of the reduced supply from the Ivory Coast.
The flow of material from Cameroon, Congo and the Central African Republic has been steady, and overall supply of sapele appears to be adequate for the current demand, although customers are said to be keeping stocks tight wherever possible. According to one source, a large proportion of the UK’s supplies are bought from the Continent where prices are steady to firming.
Log shortages
On a more negative note, a shortage of logs has been reported from Ghana. One UK-based operator noted: “It is very difficult to get what we want out of Ghana. We can get wawa but other primary hardwoods like odum, utile and sapele are in very short supply.” The country’s severe conservation restrictions were starving the domestic forestry industry of material at a time when the problems in the Ivory Coast provided supply opportunities for others.
Far Eastern hardwoods
A mixture of comments was received on the subject of UK consumption of Far Eastern hardwoods. Some sources suggested sales of meranti were healthy and stocks were moving freely against a backdrop of firm prices. Others maintained that forward buying activity has been reduced by the availability of landed stocks on the Continent and material on the water. Demand for meranti has fallen in some of the major Continental markets – including Germany.
According to one contact, construction growth in the UK has been having little positive impact on Far East hardwood demand. “This is usually the busiest time of the year – but it’s just not happening at the moment,” he lamented. “Our customers don’t seem to have more than a few weeks’ work on their books, and that situation is reflecting back down the supply chain.”
Based on previous experience at this time of year, mills are expected to look to turn stocks into cash ahead of a period punctuated by some significant breaks, notably Chinese New Year. A leading importer noted that some deals were available on meranti although the past few weeks had been characterised largely by price stability.
Shippers’ prices for keruing are said to vary considerably, with some reports suggesting that log restrictions have pushed up prices by more than 10% since the start of the autumn. That said, UK demand for the majority of 2002 has been what one industry player described this week as “dismal”.
North American species
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“According to one contact, construction growth in the UK has been having little positive impact on Far East hardwood demand |
A major issue for North American hardwoods surrounds the amount of green lumber in the pipeline, with many North American exporters claiming significant problems in securing sufficient supplies for the winter. Log inventories are said to be extremely low in some instances and a number of mills have reportedly closed down dry kilns. Several UK importers noted that, while the US has been complaining about a dearth of green lumber for some time, wood continued to be available. Prices have remained largely “static” although some shippers are said to be “trying to get a few extra dollars by doing different mixes”.
Other importers expressed concern over green lumber supplies, with one suggesting that this might lead to shortages in “some of the more difficult sizes”. He pointed by way of example to 2in oak and the heavier sizes of hard maple and cherry.
For the moment, the price of some thinner sizes of maple have reportedly suffered a slight fall, according to several importers, while black walnut remains difficult to obtain “at a sensible price”. Although produced in only small volumes, this black walnut has remained in vogue for some considerable time and shows no signs of losing its popularity in the UK. Demand for cherry was described this week as “steady” but generally lower than in 2001, while reasonable demand was reported for white oak.
Imports decline
A UK-based specialist in North American hardwoods bemoaned figures showing a substantial fall in use during the first half of this year and predicted an even more significant decline in the second half of the year. Latest statistics show that US exports to the UK of all species of hardwood lumber fell by 12.8% to 63,481m3 in the first seven months of this year, while the overall value of shipments slid 18.9% to US$44.9m over the same comparative period. This compares with a 6.8% increase in the US’s global export volumes of hardwood lumber in January-July this year.
A large proportion of the hardwood entering the UK market was destined for high-class joinery contracts, the same specialist pointed out. Economic uncertainty and a general lack of confidence had led many of these projects to be shelved “and the temperate hardwoods seem to have been hit harder than the tropical hardwoods”, he said.
Brazilian mahogany
The conservation issues surrounding Brazilian mahogany are such that, according to one trader who recently visited the country, some operators referred to “that red timber” rather than use the word ‘mahogany’. UK demand for cedar has been reasonable but “spasmodic”, while more interest has been reported for secondary species like tatajuba.
Speaking recently at the London Hardwood Club, Hardwoodmarkets.com editor Rupert Oliver indicated that the impact of eastern European hardwood exports was extending beyond Germany and Italy to the UK, Spain and France thanks to increased political stability and inward investment in the timber sector.
Feedback from the UK trade supports his contention: several contacts acknowledged an increase in beech and oak coming from the Balkans in particular, adding that grades and presentation varied from mill to mill. The price of Balkan material had “held up well” but lower levels were available from further north in eastern Europe, TTJ was told.
Meanwhile, one trader pointed to a significant increase in offers of western European beech and oak “from people I have never heard of”. This suggested, he said, that their own domestic markets were far from buoyant.
Given the general acknowledgement that the UK’s economy is brighter than that of many of its European partners, the domestic hardwood trade is disappointed by the scant impact on demand, with few buyers showing a willingness to book forward to any significant extent. Business remained “patchy” although there are clear signs that hardwood remains a popular choice among end users in the housing, commercial and retail sector who are wanting “something different”.
