Sawn fencing, decking and landscaping had a terrible start to the year as a result of the long winter. However, this market has picked up strongly and the hope is that after a late start this sector will continue to be strong later in the year than normal, resulting in overall volumes being similar to last year. Lead times on orders are already starting to extend, and although price increases are being resisted at present, this looks set to change. The pallet wood market remains busy across much of the UK driven by better levels of global trade.
The small roundwood market is beginning to heat up particularly in England and Wales. The Renewable Heat Incentive has given added impetus to the biomass market. While the grant is only currently available for industrial installations the income is so high that most anticipate a payback as quickly as 5 years which makes the scheme very attractive to off grid users of oil and gas. This in turn means increased demand for both pellets and chips. A further influence in the south is the growth of roundwood exports for OSB and wood shavings. Domestic board mills report overall demand equivalent to last year in MDF and chipboard which is predominantly used within the UK, although OSB demand, driven by export volumes, is good. High levels of domestic small roundwood volume in Scandinavia as a result of mill closures or capacity reductions mean exports from the UK are becoming more of a challenge, although new destinations are now opening up as alternatives to the traditional Scandinavian customers. At the same time, one major UK board producer is now actively developing plans for a major investment which will increase demand by 300k tonnes per year. Overall the picture looks stable in the small roundwood sector for the foreseeable future.
Disease is in everyone’s mind at the moment. Having just come to terms with Dothistroma needle blight in pine, and managing to plan for harvesting this resource before the trees become unmarketable, we are now faced with a Phytopthora outbreak which looks likely to be much worse than was originally predicted. As I write we are still uncertain about the true extent of infected stands, but we already know it has spread significantly since last year. On a positive note though, all the major players are developing markets for as much of this volume as they can, with some of it destined for sawn export, or for domestic use as a result of hard work on the sales front in converting whitewood customers to redwood customers wherever possible. With careful planning this can be tackled alongside the spruce volumes that the sawmillers need to sustain the level of market penetration they have built up over the last few years.
Overall then, it looks like the timber market should continue to be steady for the woodland owner for the remainder of the year, with new investments in both the board and sawmill sectors underpinning demand into the future.