Timbmet comment: Q1 2017

Nigel Cox, Managing Director Timbmet is BMBI’s Expert for Timber & Panel Products.

The market for Timber and Panel Products looks promising for 2017, and we remain optimistic. This is despite the uncertainty created by a snap national election and extended Brexit negotiations. We’re getting used to uncertainty. There will be variations by sector, but imports were up year-on-year in Quarter 1 2017 across most product ranges. Following the theme set by the British Woodworking Federation for its Members’ Day, we need to embrace the changes our industry faces and develop strategies for success in these changing times.

Last year the hardwood sector’s supply shortages and price uncertainties, caused by sterling’s sharp fall following the EU referendum vote, were well documented. However, in the first three months of this year hardwood prices have been more stable and while there will continue to be trend-led supply issues, we are already seeing that Oak remains popular regardless of supply source. Overall, we expect 2017 to be a more stable year for hardwood.

There seems to be no respite from the reported MDF (Medium Density Fibre) board supply chain shortages. The situation remains problematic with demand and production problems causing extended lead times from manufacturers. Prices are under pressure with all manufacturers being hit by increased raw material costs that will be passed on to the industry throughout the year.

The growth of the OSB (Oriented Strand Board) market has put pressure on supply and additional production capacity will come on stream later in the year. However, for the foreseeable future demand will out strip supply leading to price increases.

Indonesia issued the first ever FLEGT (Forest Law Enforcement, Governance and Trade) licenses during November 2016 with expectations that it would boost the share of Indonesia’s predominantly hardwood exports to the EU. Importers can be confident over the supply of legal and sustainably sourced wood with FLEGT licenses which remove the need for additional and expensive due diligence exercises. Early indications are promising with evidence that imports are increasing.

Click here for the full BMBI Q1 2017 Report

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