TIGHT TIMBER & PANEL PRODUCTS SUPPLY CONDITIONS CONTINUING INTO 2021
Friday 19th February 2021.
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.”