Wood Products Prices in The UK & Holland
1-15th Sep. 2004

Reports from the UK 

The Bank of England left interest rates unchanged this month as house prices have steadied with small increases in some areas and some declines in other areas.  

Consumer spending has also retreated and some economists are thinking the interest rates have moved up too fast. 

A recent report on the domestic hardwood trade says that good quality timbers are selling well. Oak continues to be very popular with imported oak dominating the market.  

It is reported that there is a strong demand in the UK for durable timbers for decking and cladding.  

The UK panel market is good with sales growing as construction projects take off. 

Hardwood importers are reporting increasing difficulties in sourcing American hardwoods and this could benefit tropical suppliers. 

Oil prices have firmed again and freight rates are everyone's mind as rate increases are anticipated  

Log Prices in the UK  

UK Sawnwood Prices  

Plywood and MDF in the UK 

Report from Holland  

Stocks tie up capital 

The problem now facing importers in Holland is that, due to the arrival of orders throughout summer their stocks are building up again because of the reduced demand from end-users/retailers and the increased stock holding is eating up capital.  

In an efforts to push some sales and bring stocks down analysts report that Meranti (Bukit) in the popular Dutch size 3x5" (sold as 80x130mm) is being dumped onto the local market at ridiculously low prices.  

Although prices for Peninsular Malaysian timbers seem stabile on the basis of CNF Rotterdam, and although the US-currency did not fluctuate much against the Euro in the past weeks domestic price levels 3x5" sawnwood are under severe downward pressure.  

Some sources indicate that there is a heavy price-war going on and that Meranti is being offered at such low levels (free delivered enduser's yard) that, currently it is pointless to import more from Peninsular Malaysia. Infact, at the moment, it is cheaper to buy Dark Red Meranti in Holland than in Malaysia.

Under these circumstances importers have no inclination to place new orders. Efforts were made to get Meranti exporters to accept firm bids at lower price levels but these were reportedly declined because prices mill gate prices for Meranti in Malaysia are extremely firm and the strong demand for plywood has been firming log prices.  

This situation will likely continue in the coming months especially as the rainy season is about to begin in just few weeks.  With the onset of the monsoon logging becomes more difficult and log supply will slow.  

The bright spot  

In contrast to the difficult situation in the market for Meranti, Merbau, particularly in door sizes 2.1/2x6" and 7/4x6" as well as the dimensions for stairs (7/4x10 and 7/4x12".), still enjoys firm demand in Holland.  

The fact that Merbau is in such good demand and because Merbau logs are extremely difficult to get, has led to a further firming of log prices. Malaysian millers report that they have to pay Malaysian Ringgit 1850 per ton for Merbau logs, which is a record high.  

The small quantity of Merbau that was offered CNF Rotterdam is now being readied for shipment Jan/Feb 2005 but importers are now a bit more hesitant towards the ever increasing CNF price for Merbau so that smaller back to back orders are preferred for Merbau.  

All based on container shipment at US$1900 per G.P. 40 ft. box. Freight variation for buyers account.

Abbreviations

LM       Loyale Merchant, a grade of log parcel	Cu.m         Cubic Metre
QS        Qualite Superieure	Koku         0.278 Cu.m or 120BF
CI          Choix Industriel	FFR           French Franc
CE         Choix Economique	SQ              Sawmill Quality
CS         Choix Supplimentaire	SSQ            Select Sawmill Quality
FOB      Free-on-Board	FAS            Sawnwood Grade First and
KD        Kiln Dry	Second
AD        Air Dry	WBP           Water and Boil Proof
Boule    A Log Sawn Through and Through	MR              Moisture Resistant
the boards from one log are bundled	pc         per piece
together	ea                each
BB/CC  Grade B faced and Grade C backed	MBF           1000 Board Feet
Plywood	MDF           Medium Density Fibreboard
BF        Board Foot	F.CFA         CFA Franc
Sq.Ft     Square Foot	Price has moved up or down

Source:ITTO