A scan of the major hardwood producing regions of the world reveals a myriad of supply difficulties. At the same time, however, the holiday season has served to dampen UK demand, with a number of traders speaking of the higher-than-expected levels of activity in July giving way to a slumbering August.

The UK market appears to have continued its move towards just in time order patterns, with operators running down their own inventories and buying minimal replacement volumes from landed stocks. And since a large proportion of hardwood imports are destined for the commercial joinery sector, the market is vulnerable to the sudden postponement of projects such as shop refits or office fit-outs. Furthermore, the hardwood decking market has not been mirroring the strength of the softwood decking trade in the UK, it was suggested this week.

“The hardwood market has become very sensitive – there seems to be no depth to it at all,” said one expert. Another ventured: “It’s very competitive out there and money is becoming harder to bring in. It’s like the money taps have been turned off.”

With talk this week of “blood-letting on prices” and the availability of cheap deals from some operators keen to keep the tills ringing, one exasperated hardwood expert commented: “It’s not only a case of poor demand in the UK but also of weak selling – it’s a disease in the UK. People think they will lose the order unless they sell cheap.”

Burmese teak

In terms of supply news, the Burmese government has placed a temporary stop on the export of teak logs in the light of concern over the volume of illegal logging. The longer-term plan, according to a UK-based industry specialist, is for the country to reduce its number of exporters to those sawmillers with their own supply of legal logs. Any disruption to imports of teak is likely to affect, among others, manufacturers of hardwood garden furniture and boatbuilders.

Meanwhile, the US government has imposed an import ban on Burmese product in protest at the country’s repressive regime. The European Commission is expected to reach a decision this month whether to follow suit.

Staying in the Far East, lack of worldwide demand and restrictions on illegal logging have diminished the flow of dark red meranti and have helped to keep prices reasonably firm, although more attractive offers have been available from some suppliers holding ready stock. Overall, however, UK sales of meranti have caught the general tone and have remained unspectacular over the latter part of the summer.

Supply disruption has become an accepted fact for traders dealing in the West African hardwood market. A UK trader spoke of “erratic” shipments and “contracts not coming through”, as well as of an inability to secure “proper updated information on the current status of contracts”. Against this backdrop, he observed: “We don’t want to book too much in case it all arrives at once.”

Most recently, of course, the United Nations announced that it was imposing sanctions on the Liberian timber trade – described by shipper OT Africa Line as “the first time that the international community has decided to boycott the trade in timber from any major producing nation”. It added: “Bans on log exports are common these days but, until now, they have always been implemented by the government of the exporting country.”

Mill closures

&#8220It’s not only a case of poor demand in the UK but also of weak selling – it’s a disease in the UK. People think they will lose the order unless they sell cheap”

Some timber companies in Liberia have been accused by NGOs of helping to finance the arms trade. Meanwhile, unrest in the country has prompted the closure of a number of timber operations – including a large plywood factory opened only last year under Malaysian ownership.

As for the Ivory Coast, hopes are being harboured of a return to greater normality in the near future after a prolonged period of unrest, despite recent news that the French authorities had foiled a plot to destabilise the country. Timber shipments out of San Pedro are still described as weak, partly because of the difficulty in obtaining logs given the unstable conditions in some forest areas.

Hardwood shipments from the Ivory Coast have been “very patchy depending on where the sawmills are”, according to an African market expert based in the UK. “Some are working normally but supplies from others have been slow to come.” The two species most affected by this situation have been framire and iroko. Some sizes of framire are said to be in short supply but UK consumption has been generally low during the holiday season; iroko, meanwhile, remains difficult to source, with the important Irish market struggling to obtain its favoured fixed lengths and widths.

In this context, the iroko price has remained extremely firm while framire is said to have made significant gains over the course of the last year. “The framire price hasn’t gone up much on the ground in the Ivory Coast but the strengthening of the euro has made it more expensive for the UK,” TTJ was informed. “This hasn’t affected its competitiveness because it is still effectively a cheap wood.”

Also described as reasonably firm this week were idigbo, odum and wawa; mills supplying wawa are said to have met resistance in the UK to their attempts to obtain higher prices. Meanwhile, the UK appears to be holding sufficient supplies of sapele. “A lot of sapele is coming in just in time from the Netherlands and Belgium from big traders who are buying large volumes of air dried material, kiln drying it and shipping it to the UK,” explained a contact. “This is easily fulfilling demand at the moment and fits with the fact that no-one in the UK wants to hold large stocks.”

As a footnote to the supply situation from Africa, a combination of tighter government controls over the running of forest concessions, bureaucratic delays and poor weather is said to have ensured relatively low levels of supply during the logging season in Cameroon, while wood production and exports from the Central African Republic have been dented by political events following a coup on March 15. All in all, said one African hardwood expert, it has been “a difficult year for supply”.

Disruption has also been experienced in parts of Brazil over the past couple of months. According to a regional specialist, customs officials have been subjecting some export papers and cargoes to greater scrutiny than normal, to the extent that some containers have been unloaded for checking. “This has meant that some containers have missed the boat,” it was explained, “and mills’ cash flows have really been suffering as a result.”

Mahogany interest

While mahogany has continued to emerge from countries such as Peru, the suggestion earlier this year that the Brazilian government would be allowing limited shipments of the species during 2003 has yet to turn into reality. While some in the UK hardwood timber trade appear to have turned their back on mahogany because of environmental issues, others confirmed this week that they would still be interested in buying the species “if it were available”. However, any available supplies are thought likely to be mopped up by the US.

Several contacts noted a recent firming in the Brazilian cedar price as well as an increased level of enquiry for secondary Brazilian species such as tatajuba.

North America has also struggled to catch up with some of its hardwood exports following a severe winter and wet spring in many parts. Producers in the region have been striving to keep output in line with demand so as to maintain a market equilibrium, with the result that most hardwood prices in the UK have remained reasonably firm despite slow order intakes. North American cherry and walnut have remained in vogue with many UK customers.