The American Hardwood Export Council’s 2020 European Trade Review ends on some upbeat notes. It sees Europe’s deepening green agenda creating increasingly favourable market conditions for timber and US hardwoods competing on a more level playing field with EU timber in the UK post Brexit.

That, however, is looking forward. The last 12 months in US/European hardwood trade, by the Review’s analysis, are probably best described as turbulent.

Historically severe economic contraction due to Covid-lockdown saw hardwood demand across most of Europe fall sharply, with some UK importers reporting business down 65-70% from March to May.

But as initial pandemic restrictions were lifted, the European economy overall rebounded faster than expected. The upturn was driven strongly by government fiscal stimulus and particularly robust growth in hardwood demand was reported from refurbishment and home improvement markets.

In Italy, Germany and Spain second wave lockdowns did see further demand slowdown, although in the UK there was less impact.

As the year progressed, the other issue for European importers was, increasingly, US hardwood supply. Having curtailed production earlier in the year and implemented output-restricting Covid work practices, mills were reported to be struggling to keep pace with globally rising demand.

The consequence, in the words of the US Hardwood Review Express, has been “price increases bordering on unprecedented”. Restricted volumes and supply gaps also became growing issues.

According to the Review, the combination of supply and demand factors resulted in overall US hardwood lumber exports to Europe contracting 13.2% by value in 2020 to US$232m and 8.7% in volume to 306,000m3, the lowest in 30 years. This compared to a decline in US exports worldwide of 7% in value to US$1.74bn and 5% in volume to 3.07 million m3. At the same time, Europe’s overall hardwood imports fell 13% to 1.93 million m3, the lowest in 20 years.

Contraction in the UK’s US imports was among the sharpest, down 16% to 90,900m3, with trade most seriously hit by pandemic in Q2, when it fell 50% on the same period in 2019. It then rebounded quite strongly in Q3 and further still in Q4.

Italian trade also saw 16% contraction to 34,200m3, while Estonia’s imports fell 42% to 8,100m3. Trade with Portugal was down 9%, Belgium and Denmark 7%, the Netherlands 10%, and Germany 1%. However exports increased to Ireland 1%, Sweden 5%, Greece 6% and Spain 16%, reaching 40,800m3.

By species, European imports of tulipwood contracted sharpest, down 13% to 70,700m3, with particularly steep falls in the UK (down over 6,000m3), Italy and Germany.

White oak imports fell a more muted 5% to 159,300m3, with declines in the UK (also down over 6,000m3) and Italy, offset by a significant rise to Spain.

European imports of red oak, strongly supported recently by AHEC marketing, rose 6% to 26,400m3, only the second time since 2001 the total has topped 25,000m3.

Europe’s US cherry imports rose 18% to 1,500m3, while those of ash fell 23% to 20,000m3.

Walnut imports were down 21% to 18,000m3, with increases in Belgium and Denmark, offset by declines in the UK and Lithuania, while imports of hickory fell 26% to 3,000m3, maple 18% to 2,800m3 and red alder 3% to 1,700m3.

The Review concludes that there are positive indicators for US hardwood exports to Europe for 2021. The pace of economic recovery will vary between European countries depending on how quickly lockdown restrictions are relaxed. But construction activity is improving widely and the pound and euro are forecast to continue strengthening against the dollar.

While forecasts are that Brexit will act as a brake on UK GDP growth, the fact that all its timber imports from the EU are now subject to UKTR legality due diligence and certain species to phytosanitary regulation, means potentially US suppliers competing with the EU on more equal terms.

Longer term, growing European investment in moving to a net zero carbon circular bioeconomy, with its €4.6trn Green Deal Strategy, is also seen as a positive for timber, including US hardwoods.

“The core values of the Deal align closely with key benefits of American hardwoods and elements of AHEC’s market development strategy in Europe,” said the Review.