Post on 13th May 2021
As the end of lockdown approaches, the great British public is looking forward to the doors of freedom being opened again. And just like nesting birds preparing for Spring, the homemakers of the UK are busy making lots of changes too.
The result of all of this ‘homely’ activity is that timber is experiencing unprecedented levels of demand, and it’s safe to say that supply is most definitely struggling to keep up.
Timber companies across the UK are battling to protect the prices we are charging our valued customers, but the reality is that there is a limit on how much we can absorb of the price hikes we’re experiencing.
Rather than customers wondering why prices have risen, we wanted to be fully transparent and share the current terrain of the UK timber industry…
Whilst it’s fantastic news that businesses across the country are creeping towards normality again, the impact of the past year is still being felt in UK timber yards. Tools being downed for such a long time last year hugely lengthened timber processing times, meaning sawmills struggled to maintain their pre-pandemic stock levels.
National and global lockdowns throughout 2020 restricted the entire supply chain and trade restrictions in some areas have added to the logistics of timber reaching the timber yards in their usual timely fashion.
Unfortunately, some countries are experiencing another COVID-19 surge, one being Sweden which is the UK’s largest timber supplier providing over 40% of the UK timber supply. Sawmills in Lithuania and Latvia haven’t been able to cut, mill or treat their timber due to a two month lockdown so their own stocks have been heavily depleted too.
The additional self-isolation and protective measures being enforced have caused disruption to the usual provision of timber, resulting in timber shortages across Europe. The knock on effect of this is that the timber yards and sawmills in the UK that have healthier timber stocks, are having to work to quotas to make sure that it isn’t just the big players being supplied to.
Even with this in place though, more money is being offered by various buyers to be given the lion’s share, pushing prices up overall. Supplying on this ‘allocated’ basis is causing a timber rush which is having a huge effect on the smaller UK businesses. Whether we like it or not, all timber merchants are having to work with inflated prices and are preparing for this to continue into 2022.
A trend we’ve seen globally while families have been stuck at home is a DIY revolution. Between the lockdown restrictions, and the increase in working from home potential, homeowners are remodelling and expanding their homes more than ever before.
Despite the UK coming out of its lockdown, other countries such as the USA are not quite there yet, and the demand for timber has gone through the roof. As the largest economy in the world, the supply of timber coming through existing channels was too logistically limited to meet the demands of this boom.
Timber inventories and established suppliers fell so short of keeping up with the sudden timber appetite that supplies usually destined for Europe were diverted to the USA. And because they could pay up to ensure they were given priority, the rest of the world has seen prices pushed up too. The prices are also predicted to keep rising throughout the year as demand for timber is expected to carry on rising with renovation season starting up in America.
Headlines such as “Lumber prices are up 232% and ‘could spiral out of control in the next few months and What part of a new house costs 4 times as much as a year ago? Lumber! both highlight the scale of the lumber problem the world is facing.
The global supply and demand of timber has reached such a state that the Builders Merchant Federation (BMF) and the Construction Products Association (CPA) issued the following joint warning to alert UK timber merchants like ourselves to the problem:
“Timber is a global commodity and there is an imbalance between global demand and supply that is not likely to be resolved in the near future. The UK must be prepared for higher prices to continue. European production was far lower in 2020 compared to 2019 (Swedish production down 7%, stocks down 27%; Finnish production down 15%).
UK imports of softwood during the first nine months of 2020 were also down, by 20% in volume. Production shortages were exacerbated by extremely high demand from the USA – which will continue throughout 2021.
The Chinese timber market, which was suppressed during Covid, is now rising with imports of softwood at their highest ever levels. Furthermore, both the US and China are prepared to pay far more for timber. In the US, the price of a benchmark 4×2 softwood product rose by 149% last year. European mills are back at full capacity, but the increased demand means that customers are on allocation, and the situation is likely to get worse in Q3 following holiday shutdowns in July and August.”
Wood has various grades and two extremely common ratings are C16 and C24 which relate to softwood such as pine. Wood rated as C16 is from fast growing trees, so it is softer, less straight and tends to have more knots throughout the wood. C24 wood is from much slower growing trees so is a much higher quality as it’s much stronger due to being more dense, and has far fewer knots within the timber.
We only use premium wood providers for the high quality treated timber we supply, but within the UK and Ireland, there is currently a shortage of C24 timber. To avoid gaps on their own shelves, the larger timber merchants have been flashing their cash and paying whatever is needed to make sure the volumes they need are being secured.
It isn’t just companies like Slatted Screen Fencing who use the C24 timber though, it is used heavily by home builders too which brings us onto our next problem…
Not only is timber in limited supply, it’s more popular than ever resulting in the cost of projects to homebuilders and renovation contractors now being 112% higher than those of a year ago. Add to this that the government has created a £5bn support package with the Build, Build, Build incentive to buoy the housing market, and it’s clear that timber is going to be like gold this year.
Supplies of C24 wood are limited, demand is at an all time high in the UK, and we’re having to really fight our corner against Chinese and American merchants when timber is allocated at the sawmills.
We’re trying to protect our prices as much as we can, but the reality is that no timber merchant is unaffected by the bigger picture. This looks set to continue further as America enters a renovation season fuelled further by lockdown releases.
If you have projects planned, get in touch and we’ll happily discuss your timber needs as we’re doing all we can to keep supplies and prices as constant as we possibly can.