Timber industry faces shortages in 2021
The Timber Trade Federation (TTF) has highlighted concerning outcomes of the 2021 Timber supply chain, as the industry faces timber shortages.
Mainly brought on by the ongoing pandemic, the volatile market, and the high global demand for timber and related products.
In recent years, the UK has been privileged to have access to plentiful stock of materials with extremely short lead times, particularly in 2019 due to significant stock piling ahead of Brexit. In October 2020 the TTF reported that over 1 million m3 of timber and panel products were imported into the UK, 21% higher than the same month in the previous year. The Covid-19 outbreak then forced many European sawmills to close and halt production. Unfortunately the solid performance of 2019 did not compensate for the loss in Q2 2020. Solid wood imports were 8 percent below the same period in 2019 and panel product imports were 15 percent lower.
Why? A combination of interlocked events
Directly impacted by the effects of the nationwide lockdown in 2020, most markets across the G7 developed economies saw a drastic acceleration in the sales of building materials, mainly for DIY and garden projects, leaving Britain’s supply chain depleted with little stock left for sale. The main drivers of growth in early Q4 2020 were softwood and OSB imports, along with higher volumes of plywood and MDF in comparison with the same period in 2019.
In addition, and eclipsing the above, the USA who are by far the world’s largest country and economy, saw a rapid surge in demand which could not be serviced through their already established supply chains. This led to key suppliers of Europe diverting their stock to the USA where prices spiralled and continue to set new records.
In contrast China, the world’s fastest growing Economy, has slowed from 18% annual growth to 6% and falling. Should the Chinese economy take a turn and start to boom again, and demand from the USA remain high, the rest of the world will continue to see shortages and a rapid price inflation.
Consumer demand for timber products in the UK is still very high, leaving little opportunity for sawmillers to catch up and restore their stock to the levels previously held in the UK. At the time of writing, COVID-19 cases are still surging in many countries around the world, including Sweden - the UK’s largest timber-supplying partner. The increase in cases has resulted in a tightening of operating conditions and interruptions where transport staff are required to self-isolate.
The Brexit transition period adds further pressure to import logistics and supplies, as the timber industry will be in competition with many other industries trying to obtain road haulage capacity within the UK. There also remains a lot of uncertainty over import and export taxes, and potential increases in costs. Freight container transport costs have radically escalated, impacting bulk service vessels and schedules.
David Hopkins, Chief Executive of the Timber Trade Federation, said: “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.”
Gary Froggatt Forest Product Category Manager, who is responsible for keeping Forest products flowing into Howarth Branches said, “during my 37 years’ experience in the timber industry, I have never known it to be so challenging to secure materials. So far 2021 is beginning to make timber supplies in 2020 look easy, the challenge now for our industry is to achieve a balanced flow of material in order to meet our customer’s expectations.”
To reduce the impact of timber shortages on your business, plan ahead and discuss your timber requirements with your local Howarth Timber & Building Supplies. Find your nearest branch here.