The supply rather than the demand side of the equation has continued to preoccupy the hardwood trade during the summer months, and nowhere is this more true than for North American species. Availability has increased of late because the summer months have enabled producers to boost output levels. However, supply in the UK remains finely balanced in almost every instance. TTJ was told this week: “Buyers shouldn’t be complacent, especially if they want to buy from particular productions.”

In UK terms, supply is particularly tight across all thicknesses of white oak with North American hardwood enjoying the greater demand in this country. Availability of ash and hard maple has also been less than plentiful, while the tightness of supply of cherry and walnut has been less pronounced because the UK buys smaller volumes of these species.

Prices of all these hardwoods are quite firm and showing no signs of weakness. Some contacts have even been reporting the emergence of inventory gaps, with mention made in particular of white oak in 2in thicknesses and above.

An expert in North American hardwoods argued that with autumn around the corner, supply tightness was likely to increase and prices could be expected to rise still further in coming months. “We should see some shortages of North American hardwoods in the UK this winter, with the exception of tulipwood, which is weaker than the others,” he said. Noting that UK buyers had benefited in recent times from the cushioning effect of a weak US dollar, he pointed out that the currency had been showing glimmers of improvement in relation to the pound over recent days.

Healthy US demand

After a difficult few years, North America’s hardwood producers are now enjoying healthy demand both at home and overseas, and are looking to exploit these market conditions to the full by focusing on higher value species. At the same time, they are said to be wary of strong demand from China, partly because of long-term implications for manufacturing jobs at home.

Against this backdrop of restricted supply, UK demand for North American hardwoods is the proverbial curate’s egg. “We don’t know what we are going to get from one week to the next,” said one trader. “There is no continuity to buying patterns – people are buying only what they need or what they can sell. We are hoping the end of the holiday period brings a return to normality.” Another trader suggested demand had been stronger this summer than in previous years.

Supply issues also dominate the West African hardwood picture, although the holiday season in Europe combined with rains in Africa have generally meant a quiet time for this sector. Iroko remains in short supply and prices have been “escalating to an alarming level”, according to one regional expert. Another agreed that the price of this species was becoming overheated and this was having an adverse impact on buyer interest, with evidence of customers switching to either sapele or framire.

Sapele prices gained ground during the spring due in part to good demand from China, but have since settled. That said, the major interest shown by the Chinese and Americans in West African hardwoods is said to have given local producers a welcome injection of confidence. However, according to several sources, the improved export demand has also led to talk of contracts not being shipped and gazumping.

Meanwhile, demand for sipo is said to have declined because of the widening differential between its price and that of sapele. “This could be a long-term problem for sipo because some people believe it no longer deserves the premium it gets,” said one contact, although others contested that.

According to several sources, supplies of wawa out of West Africa have been difficult with some contracts described as “very late or not being shipped at all”. This situation has led to a measure of desperation among some UK customers to obtain the limited volumes available, they said. By contrast, another expert reported reasonable volumes coming into the UK and steady demand.

&#8220We don’t know what we are going to get from one week to the next. There is no continuity to buying patterns – people are buying only what they need or what they can sell. We are hoping the end of the holiday period brings a return to normality”

Figures for the first half of the year show a decline in the volume of kiln-dried sawn timber imported from Ghana into the UK, down from around 7,700m3 last year to 6,530m3 this time, with wawa believed to account for a substantial proportion of the total. The decline is attributed in part to the fact that wawa is a moulding timber and capacity has been lost in this area.

Meanwhile, French buyers normally purchase their niangon from Liberia, but civil unrest there has led to a firming of prices and evidence of a switch to sapele.

In the Far East, renewed UK interest in dark red meranti – as well as higher freight rates – has helped to propel prices upwards during the summer. Both 1in and 2in material has gained around 6% since TTJ’s previous hardwood report in June, while 1.5in is said to have moved slightly higher. “Supply is generally tight in the sizes that the UK uses,” it was suggested this week.

Potential increases

The previous report also told of a 25% surge in Far Eastern keruing prices over the previous nine months and of the potential for more increases. Latest reports indicate a further rise of around 8% since mid-June, mainly because healthy demand from the Far East plywood industry for keruing logs has limited the volumes available for lumber. Not for the first time contacts commented this week that customers in the UK were desperate for an extremely limited supply. One regional expert observed that the US and Japan represented more attractive markets for the mills because they were generally asking for easier specifications and at a better price.

Several contacts confirmed that they have fielded increased interest during recent months in MTCC-certified material, despite the fact that it commands prices approximately US$15/m3 higher than non-certified material. One contact said: “Some people are expressing an interest in MTCC certification first and price second. Some customers now appear willing to pay a bit more – with the emphasis on ‘a bit’.”

Reports suggest that Malaysian shippers have already responded to this elevated level of interest by attempting to raise prices of MTCC-certified lumber.

Also on the Far Eastern hardwood front, The Timber Trade Federation (TTF) has advised members trading in Burma to ensure they have a good understanding with their suppliers after NGO group Burma Campaign sent letters to UK hardwood traders seeking confirmation that they would not trade in Burmese teak. The TTF advised members should also have a way of demonstrating that, within limitations, their suppliers operate responsibly.

In South America, supply of cedar has been limited this season by a shortage of logs, with several contacts attributing this to the fact that many operators do not have their required management plans in place. Most contacts reported a recent pick-up in UK demand for cedar and a failure among many customers to realise the extent of the supply tightness. Sustained interest was also reported for other South American hardwood species such as ipe, jatoba and tatajuba, although it was stressed that this had not led to “flat-out” buying.

Many hardwood traders in the UK have turned their back on Brazilian mahogany because of the controversies and difficulties that have surrounded the species over recent years. Furthermore, the Americans have generally been prepared to outbid other markets to attract whatever volumes have become available. Thus, with reports of some previously produced stocks of mahogany having recently gained approval for shipment, most experts expect the Americans to snap up the majority. However, TTJ was told this week that none of this material had yet been shipped.