Wood Products Prices in The UK & in Holland    
16-30th April  2004

Market News from the UK 

Economists in the UK are saying that the UK economy is now "firing on all cylinders" with growth rates expected to reach 3.5% this year and next. However, they are quick to point out that the future is not without danger.

Analysts report that confidence in both the manufacturing and services sectors is strong with domestic and export orders up.  One problem that has surfaced is the difficulty in recruiting experienced staff.  However, with the enlargement of the EU and the ease at which labour can flow, this problem may solve itself.

The UK housing boom shows no sign of easing with house prices rising by more than Streling10 per day according to the building societies! The continued increase in house prices is because of low interest rates and the acute shortage of new homes. Housing completions are down by 16% over the past year according to the trade. 

The overheating housing sector and the rapid improvement in growth forecasts is likely to prompt the Bank of England to raise interest rates soon.

The construction group Travis Perkins has reported sales up 12% in the first 4 months of the year compared to the same period last year.

In the US hardwood sector, data shows that last year the UK imported less US hardwoods but prices generally firmed largely because of shortages of White Oak a shortage caused by bad weather in the US which limited harvesting.  

Log Prices in the UK 

UK Sawnwood Prices  

Plywood and MDF in the UK 

Market Report from Holland 

In the previous report for the Dutch market, there was an unfortunately error in the prices so, to begin with, the prices as of April 15 2004 are shown below.

Prices valid in the period 16-30th April are reported at the end of this section of the report.

 Prices of some major Asian species CNF Rotterdam per ton of 50 cuft. April 15 2004

 Malaysian DRM Bukit KD Sel.Bet PHND in 3x5" at USD 1030

Malaysian Nemesu KD Sel.Bet PHND in 3x5" at USD 1045

Indonesian DRM Bukit KD Sel.Bet PHND in 3x5" at USD 1005 (lengths through 14')

Malaysian DRM Seraya KD Sel.Bet PHND in 3x5" at USD 1060

Indonesian DRM Seraya KD Sel.Bet PHND in 3x5": no stock currently

Malaysian DRM Seraya SGS certified (Keurhout) KD Sel.Bet PHND in 3x5" not available;

MTCC certified Seraya KD Sel.Bet PHND in 3x5" can be done at 

USD 1070/1080 Malaysian Merbau KD Sel.Bet Sapfree in 3x5" at USD 1070

 All is based on container loading. Merbau prices are based now on loading by 40fter container, due to the increase late last year in break bulk freight charges (MYR 80/t). The prices above are based on a container shipment Port Kelang in Malaysia to Rotterdam at USD 1900 per box.

 Prices Moving  

It will be seen that, by the end of April, there has been a notable increase in the prices for the various Meranti-species compared prices at the end of the month. On the other hand, it will be seen that certain specifications cannot be quoted because the stock position of exporters in Malaysia for typical Dutch sizes is either extremely low or sold out. Under the present conditions it is very difficult for millers in Malaysia to get log supplies.

 Another factor of importance is that, all of a sudden, there is a more optimistic feeling in the Dutch hardwood trade and this is reinforcing the current prudent purchasing policies of the importers. Many ask "is this quicksand or indeed a real recovery of the market"

 Most analysts say that it is too early to tell but, the fact is that, some joineries mills seem to have a stronger order book position and, anticipating that this may lead to business, the traders have start ed to purchase the few parcels which exporters can offer.  The importers are aware of the tight supply situation in Malaysia and, with likely freight increases of approximately US$200 per 40 ft container (Port Kelang to Rotterdam) rumoured, the pressure is towards higher prices so the trade has started to buy.  They do so now being afraid that, if they wait, they may miss the chance to pick up what little volume is available and will be caught by higher shipping costs.

 As analysts say, what is happening now, as far as purchasing is concerned, is nothing less than follow the leader. Over a long period of time traders and end-users in Holland have introduced tough measures aimed at bring down landed stock levels and these have been effective as overall landed stock in Holland are now not high. These measures, along with the hand to mouth purchases have lowered cost levels and, with some stirring in the market now, the feeling is that no-one wants to be caught without landed stocks if the market movement is sustained to the beginnings of a recovery.

 Caution Urged

The sentiment is now that the market will pick up and that more building permits will be issued and the mills will have ample work. However, analysts warn a prudent and careful approach is the best approach so as to avoid any overheating of the market. Speculative or reckless buying is not good as there is little evidence of a sustainable market recovery. It must be remembered that the economic situation in Holland continues to give reason serious concern. Not a day passes when the government announces additional spending cuts.

The risk is that there is a danger of over optimism. It is good to remember that about a year ago one or two importers suddenly had a more optimistic view of the market and started to buy. Unfortunately that hoped for recovery did not materialise and led to the stock dumping and severe price cutting.

The exporters have been watching events in Holland and are of the impression that a recovery of the Dutch Meranti market is likely. This is leading them to be cautious about revealing the available positions. Over the past months the exporters have been on the sidelines, but are now beginning to offer some small parcels for prompt shipment against current better price levels. Nevertheless the volumes that are offered (and those that are expected to be offered) will probably not be big, judging from the idle capacity of the KD-plants where contacts report that there are not many parcels in typical Dutch sizes. The current price development of PHND-Meranti will no doubt lead to lower availability of Nemesu and Seraya for the Belgian market as the Dutch pay a better price for lower grade (PHND).

Tight Supplies  

One thing good in the current situation is that traders now seem more conscious of the extremely difficult supply situation in Malaysia. Sentiment has also been given a boost as the US dollar has gained some ground on the Euro moving from close to 1,30 to 1,185 dollars per Euro. All this has led to a remarkable improvement of the sales price free delivered Dutch buyers' yard. It is rather amazing how fast the trend turned. A Few weeks ago Indonesian Bukit 3x5" could perhaps make Euro 500 per Cu.m, now it is almost impossible for a end-user in Holland to push the price below Euro 610/620 per Cu.m.  This clearly demonstrates how whimsical the Meranti-market in Holland can be, one week there is a bout of severe price discounting to push some sales at any cost. A Few weeks later importers tumble over each other to outbid each other to secure at least some volume but at levels considerably higher than the landed stock that they were forced just days earlier.  

All based on container shipment at US$1900 per G.P. 40 ft. box. Freight variation for buyers account. Merbau shipment is now based on container loading due to the hugh breakbulk freight increase of Malaysian Ringgit 80/ton.