What a difference a year makes. At the beginning of 2013 demand was moderate and wintry weather which lasted well into April restricted despatch from the forest as well as building activity. This year has been the wettest in over 200 years as many know to their cost, but across the high producing areas of Scotland lost days access due to snow and ice can be counted on the fingers of one hand. Combine this with what can only be described as unprecedented demand across all sectors, and it is fair to say that our industry is buzzing!
Last year ended like no other in terms of timber demand. The normal slow down due to winter weather and less house starts never came, which caught many sawmillers by surprise. This resulted in prices rising almost weekly towards the end of last year culminating in unprecedented numbers of bidders paying record roadside log prices at the recent FC tenders in all countries. Today supply and demand are more balanced and therefore prices are not on the same upward trajectory, but are nevertheless still at historic record levels and look set to remain so for the foreseeable future. Imports of sawn timber are starting to rise as a result of both demand and currency influences, but there is still a comfortable gap between domestic and imported sawn prices which should mean domestic demand for sawlogs remains strong.
Demand for bars and pallet is also very strong resulting in significant price rises for these products. Customers who had moved into cutting spruce only have now moved back into taking a wider range of species in order to secure sufficient volume, but even so there are too many mills chasing the same sub 16cm top diameter portion of the tree for pallet and fencing products. The recent stormy weather means that the normal fencing demand associated with new house builds will be boosted by repairs to existing fences once the weather improves and the insurance companies approve the work, so it looks like a good year for fencing product demand.
Small roundwood has also been in strong demand, although perhaps this is showing some signs of weakening as the open winter, combined with strong sawmill activity producing high levels of co-products, means the mills are generally well stocked. Both small and large scale biomass operations are now providing an alternative to the traditional markets and helping to maintain good prices. Norbord have announced that they have applied for planning permission for a new continuous press at their Dalcross site which, when combined with their CHP demand, will see a doubling of their intake within the next couple of years which is welcome news for forest owners throughout Scotland.
Whilst the stormy winter here has caused some windblow, most reports so far suggest that it has not caused widespread damage, except across the South-west of England and up into Wales. However, in Sweden, North Germany and Denmark substantial windblow has resulted in plenty of log and small roundwood availability and hence less enthusiasm for export volumes from the UK for the time being. However, the strong domestic demand means that this is not generally a major issue.
With a significant proportion of the harvesting resource now involved in felling infected larch, spruce volumes are very much in demand. We await the Spring flush with a certain amount of trepidation as we will then know the extent of spread of Phytopthora and its effect on the harvesting plans of forest owners for this year. However, even based on the current level of infection, spruce log prices will continue to be good as supply struggles to meet demand.
Graeme Ralph
March 2014
Demand for bars and pallet is also very strong resulting in significant price rises for these products. Customers who had moved into cutting spruce only have now moved back into taking a wider range of species in order to secure sufficient volume, but even so there are too many mills chasing the same sub 16cm top diameter portion of the tree for pallet and fencing products. The recent stormy weather means that the normal fencing demand associated with new house builds will be boosted by repairs to existing fences once the weather improves and the insurance companies approve the work, so it looks like a good year for fencing product demand.
Small roundwood has also been in strong demand, although perhaps this is showing some signs of weakening as the open winter, combined with strong sawmill activity producing high levels of co-products, means the mills are generally well stocked. Both small and large scale biomass operations are now providing an alternative to the traditional markets and helping to maintain good prices. Norbord have announced that they have applied for planning permission for a new continuous press at their Dalcross site which, when combined with their CHP demand, will see a doubling of their intake within the next couple of years which is welcome news for forest owners throughout Scotland.
Whilst the stormy winter here has caused some windblow, most reports so far suggest that it has not caused widespread damage, except across the South-west of England and up into Wales. However, in Sweden, North Germany and Denmark substantial windblow has resulted in plenty of log and small roundwood availability and hence less enthusiasm for export volumes from the UK for the time being. However, the strong domestic demand means that this is not generally a major issue.
With a significant proportion of the harvesting resource now involved in felling infected larch, spruce volumes are very much in demand. We await the Spring flush with a certain amount of trepidation as we will then know the extent of spread of Phytopthora and its effect on the harvesting plans of forest owners for this year. However, even based on the current level of infection, spruce log prices will continue to be good as supply struggles to meet demand.
Graeme Ralph
March 2014
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