Q3 2021 will be the biggest challenge the structural timber sector and its customers have ever faced.
In terms of construction, Sweden is our single largest supply source providing almost half of the UK structural timber. At TTF we have great respect for our Swedish partners who have consistently worked throughout the pandemic to meet the timber needs of the UK. This means we need to take extremely seriously the recently released information from the Swedish wood industry that:
“Swedish sawmills have been able to keep production going during the pandemic. However, increasing demand for wood products globally has seen stock at the Swedish sawmills run down, leading to the lowest stock levels for over 20 years. Production is continuing at full throttle and March became the best production month ever for the Swedish sawmill industry.”
As structural wood buyers will already be more than aware, the supply/demand balance for Q2 2021 means that almost all wood arriving in to the UK has been presold to customers and despite strict allocation, most buyers are not able to obtain the full quantities they want to purchase for their business. This situation has been made worse because there are insufficient HGV’s available to get the timber out of the UK ports and into UK customers’ yards.
As we enter July, sawmills and timber production facilities in Sweden and other European countries start to close for essential summer maintenance and this will significantly reduce the available supply of structural timber for the UK. In order to maintain the supply chain during this summer shutdown period, there has previously been significant reliance on Swedish sawmill stocks. However, if these stocks are now at their lowest level in 20 years there will not be sufficient supply to satisfy UK structural timber demand in Q3. Although prices have risen substantially from an artificially-low point towards the end of 2019, they have now exceeded the levels of 2018, and are set to increase further as the current supply situation significantly worsens.
TTF has been warning since the beginning of the year that we believed Q3 would be the most difficult part of the year and there is now sufficient information to support this assessment. On this basis we would urge manufacturers and those in the timber frame and trussed rafter sections to consider the following actions:
If there are any doubts that ALL construction materials are facing the very same issues we would urge you read the latest product availability statements form the construction leadership council.
This was supplied by Nick Boulton of the TTF.