With Q4 underway, sluggish demand has been creating problems for UK softwood traders as they struggle to find enough sales to carry through to the year end.

This has led to fierce competition which has forced selling prices into a downward spiral as shippers and importers fight for any volume, they can attract to keep stocks turning over. Against this background, UK merchants have been maintaining a cautious approach to buying in an attempt to keep their inventories under tight control, while at the same time trying to ensure they can supply customers’ needs.

Merchant business has been patchy. Some regions faring better than others, but overall demand remains poor up and down the country as call-offs from house builders and construction companies lag expectations.

Softwood prices have remained on a weakening trend since August which has not gone down well with those businesses holding stock. Once again, they are facing a devaluation in their inventories and subsequent a drop in profit margins. In many cases the situation is beginning to compound losses for each cubic metre sold.

The most widely held opinion across the trade is that the chancellor’s decision to defer the budget until November 26,has left people sitting on their hands. Until a clearer picture emerges of the direction the economy is likely to take, and how the fallout will affect them, they are holding back from making commitments.

Source: TTJ