The Timber Trade Federation is advising
all timber users and buyers to strengthen their purchasing strategies in
dialogue with their suppliers, as a lack of stock on the ground and tight
supply conditions are set to continue well into 2021.
The very challenging situation for the timber supply chain in 2020, affected
by pandemic-related issues and massive changes in market dynamics, and
exacerbated by high levels of global demand for timber and wood products, is
setting the scene for continuing tight timber supply conditions certainly into
Q2, 2021, if not longer, warns the Timber Trade Federation.
Early in the pandemic many European sawmills were temporarily shut.
Lockdowns across the UK and Europe then produced a massive surge in demand for
timber for DIY and garden projects, which began to impact supplies through to
Britain’s construction sector. Additional high demand for structural
timbers, particularly CLS and carcassing, from across Europe and especially
from the USA, has also affected the amount of material available in
traditionally well-stocked markets such as the British builders’ merchant
sector.
With demand continuing at a high level into 2021, there has been no ‘quiet
season’ in Britain’s building trade, and thus little opportunity for sawmillers
and importers to replenish stocks on the ground here in the UK to their
previously-plentiful levels. COVID-19 is still producing spikes in cases,
such as that recently seen in the UK’s largest timber-supplying partner,
Sweden, where an increase in cases has resulted in a tightening of operating
conditions and delays where vessel crews are required to self-isolate.
Import logistics, especially with the end of the Brexit transition period and
the new arrangements with the Republic of Ireland and Northern Ireland, may add
further pressures on supplies, as the timber sector will need to compete with
many other industries in obtaining road haulage capacity within the UK.
To ensure available material is distributed equitably, many Timber Trade
Federation members are continuing to operate on customer allocations.
Volumes are likely to be available but on much longer lead times than
previously. Merchants, manufacturers and building contractors are advised
to contact their supplier to discuss future needs, and similarly to become more
aware of the factors influencing suppliers’ capacity to meet demand.
Companies without a longer-term purchasing strategy will struggle to replenish
stocks through just-in-time buying in Q1 and Q2, 2021.
David Hopkins, Chief Executive of
the Timber Trade Federation, said: “Pre-COVID, timber buyers were used to there being
plentiful landed stocks available to meet immediate demand. Suppliers
were also used to having time over traditionally quiet periods in the trade to
re-build stocks for the following season. This situation has now been
turned on its head.
“It is understandable that many
customers should be surprised by, and angry about, the new reality we are
facing together. The reported price inflation has also made it difficult
for some manufacturers to accurately price projects for customers.
“We would like to reassure the wider
sector that volume supplies are available, though on much longer lead times
than we have all been used to. This situation will be with us well into
2021 so we advise contacting your suppliers to discuss meeting your needs for
the year ahead. The challenge going forward will be to achieve the
balanced product mix needed by the market, a factor which may be further
complicated by the haulage demands and new customs and plant health procedures
engendered by Brexit.”
