Timber and panel market

Published Monday 13th May 2013
We're committed to keeping our customers up to speed with emerging and developing market issues that could affect their business, enabling them to plan for the future by factoring in potential increases in material costs and mitigate the possible impact on their on-going profitability.

Our customers value our up-front approach to pricing and as such, we have provided our customers with an advanced warning of shifts in the timber and panel market that could lead to significant price fluctuations in the near future.

Background

As the fallout from the global recession slowly subsides, we've seen significant supply stresses in almost all product types around the world. This is an unprecedented event in our industry and as such, it's extremely difficult for us to accurately forecast the impact.

During the economic downturn, producers up and down the supply chain were forced to downsize their operations from the forest, right through to the dockside. This, in turn, has led to a lack of capacity, which has put a growing strain on the market as demand increases across the world.

The net effect of this trend has been an inevitable rise in prices. Producers are in a stronger position to select which markets they wish to trade in and in this regard, the EU falls short of the favourable conditions offered by developing countries.

Other factors that we've identified as having an impact on the global pricing of timber and panel products include:

  • Labour shortages
  • Growing shipping costs
  • Haulage costs (particularly in the US)
  • The strength of the pound in the global currency market.
Our Response

International Timber has been doing its best to mitigate the ongoing supply issues. And as far as is reasonably possible, we've been able to absorb the vast majority of the cost price increases.

Our current stock profile and outlook is favourable and we've agreed allocations with all core product ranges from multiple suppliers across the world. It's our aim to be in a position where we can guarantee continuity of supply to our customers during a time of scarcity.

However, the forward allocation of material doesn't enable us to offer a fixed position on prices and it's unlikely that we'll be able to offset the oncoming industry-wide cost rises.

In the short-to-medium term, we expect the following headline price increases:

Hardwoods and Clears +15 to 20%

Softwoods +5 to 12%

Panel +5 to 10%

Engineered, cladding, et cetera - increases in line with material type above.

These figures are purely indicative and could be subject to revision at any time without notice. We are committed to keeping our customers informed at all times and with this price statement, we're providing our customers with the knowledge they need to be properly prepared for future. This is particularly important for those who are providing advanced tender quotations.

If you'd like to know more about how cost increases could impact your project, please get in touch with our specialist department managers. In most cases, we'll be able to give you a more accurate breakdown of the forward price compared with current levels - and clearer guidance on which to base your business decisions.