Sweden's timber supply at 20-year low.
Sweden's timber supply at 20-year low.

Timber prices up 50% in face of ‘unprecedented’ demand

4 August 2021

 

Timber prices have risen sharply due to a triple hit of high demand, HGV driver shortages and climate crises
The Timber Trade Federation (TTF) said suppliers have faced a post-pandemic “surge in demand” for timber this year, leading to the average import price of softwood increasing by 50% between January and May – a situation which is expected to continue.
Construction activity for this period has grown at the fastest pace since June 1997, with DIY and building projects accounting for the two-fold rise in demand for softwood. 
However, Sweden, which supplies almost half of the structural wood used in the UK, has recorded its lowest stock levels for 20 years and North America supplies have been affected by environmental issues such as insect damage.
While the pandemic has been cited as the biggest factor in supply problems, David Hopkins, chief executive of the TTF, told the BBC there are “other factors at play”.
“We've got these huge forest fires raging across North America that will take lots of timber out of production,” he said, and added "the fires, and now the bugs, are taking out a significant volume from the market".
The UK’s ongoing HGV driver shortage has also played a role, leaving some customers with very long delivery delays when goods arrive in the country, or having entire shipments cancelled. 
The UK government said it is committed to trebling the number of trees planted by the end of this Parliament and to create more UK woodland areas to boost supplies of UK-grown timber.
TTF said it is also investing in supply capacity and is planting multiple trees for every one harvested.
Despite the shortages, TTF remains “extremely positive” about the future of the timber industry. 
TTF policy manager, Liam Macandrew said: “It should be emphasised the situation we are in right now is without precedent, and it comes primarily down to the pandemic which has disrupted normal global demand levels and supply chains. 
“While prices have risen and fallen over the last 13 years, the prices we are currently seeing are far outside the bounds of normal levels over the past year, and reflect the vastly increased level of demand.
“This would strongly suggest that once other factors start to return to more usual levels as the pandemic eases, a price adjustment is likely to follow.”
Macandrew said as timber is a renewable and low-carbon building material, it will play an “essential role” in helping the UK reach its net zero targets.

Timber prices have risen sharply due to a triple hit of high demand, HGV driver shortages and climate crises

 The Timber Trade Federation (TTF) said suppliers have faced a post-pandemic “surge in demand” for timber this year, leading to the average import price of softwood increasing by 50% between January and May – a situation which is expected to continue.

Construction activity for this period has grown at the fastest pace since June 1997, with DIY and building projects accounting for the two-fold rise in demand for softwood. 

However, Sweden, which supplies almost half of the structural wood used in the UK, has recorded its lowest stock levels for 20 years and North America supplies have been affected by environmental issues such as insect damage.

While the pandemic has been cited as the biggest factor in supply problems, David Hopkins, chief executive of the TTF, told the BBC there are “other factors at play”.

“We've got these huge forest fires raging across North America that will take lots of timber out of production,” he said, and added "the fires, and now the bugs, are taking out a significant volume from the market".

The UK’s ongoing HGV driver shortage has also played a role, leaving some customers with very long delivery delays when goods arrive in the country, or having entire shipments cancelled. 

The UK government said it is committed to trebling the number of trees planted by the end of this Parliament and to create more UK woodland areas to boost supplies of UK-grown timber.

TTF said it is also investing in supply capacity and is planting multiple trees for every one harvested.

Despite the shortages, TTF remains “extremely positive” about the future of the timber industry. 

TTF policy manager, Liam Macandrew said: “It should be emphasised the situation we are in right now is without precedent, and it comes primarily down to the pandemic which has disrupted normal global demand levels and supply chains. 

“While prices have risen and fallen over the last 13 years, the prices we are currently seeing are far outside the bounds of normal levels over the past year, and reflect the vastly increased level of demand.

“This would strongly suggest that once other factors start to return to more usual levels as the pandemic eases, a price adjustment is likely to follow.”

Macandrew said as timber is a renewable and low-carbon building material, it will play an “essential role” in helping the UK reach its net zero targets.

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