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Wood Products Prices in The UK & Holland

16-31th July 2010

Report from Europe


  Latest EU data shows no pick up in tropical hardwood
imports during 2010

The latest EU-wide trade data indicates that imports of
hardwoods from less developed countries (LDCs)
remained at an extremely low level during the first quarter
of 2010. During this period, European imports of
hardwood logs, sawnwood, plywood and veneers from
LDCs totalled no more than 775,000 cu.m. This is almost
equivalent to the volume recorded in the first quarter of
2009, a year when total European imports of LDC
hardwood products fell by over 40%. The total value of
EU imports of these commodities during the first quarter
of 2010 was actually down 12% compared to the same
period in 2009.

The significant decline in the unit value of EU imports of
LDC hardwoods during 2009 seems surprising given clear
indications of rising prices for many tropical hardwood
products from mid-2009 onwards in response to declining
availability. To some extent, the overall unit value figures
are distorted by their inclusion of eucalyptus logs
(significant but rather inconsistent volumes of these very
low-value hardwood logs are imported by Portugal and
Spain from Uruguay every year to supply the paper
sector). However, the decline in unit value in the
hardwood sawn and plywood data may also indicate that
European importers and manufacturers are switching to
lower grade and cheaper raw materials in an effort to cut
costs during the recession. The figures certainly underline
previous reports suggesting that tropical hardwood
shippers seeking to push through CIF price increases in
Europe this year have continued to come up against firm
resistance from European importers.

The continuing weak hardwood import performance in the
first quarter of 2010 is all the more disappointing as it
seems to confirm that the apparent upturn in European
buying in the last quarter of 2009 was not a response to
any real improvement in European consumption. Rather,
as many suspected, it seems to have been the result of
short-term efforts by importers to fill gaps in heavily
depleted stocks at a time when CIF prices seemed set to
rise.

According to the data, European imports of hardwood
sawnwood, logs and veneers from LDCs made very little
ground in the first quarter of 2010 compared to the last
quarter of 2009. Imports of hardwood plywood from these
countries actually showed a quarter-on-quarter decline.

Imports by main EU importing countries
Imports of LDC hardwood products by France, the UK,
Netherlands, and Belgium were slightly weaker in the first
quarter of 2010 compared to the last quarter of 2009. The
best that can be said for Italys imports is that they appear,
at last, to have hit bottom in the final quarter of 2009 and
showed some slight signs of upward movement in the first
quarter of 2010. Of all large European buying countries,
only Germany seems to be showing signs of a sustained
increase in imports of LDC hardwood products. This is in
line with GDP data which indicates that the economy in
Germany is bouncing back more vigorously than in other
European countries.

The rather volatile data for Spain and Portugal needs
careful interpretation because it is strongly influenced by
eucalyptus log imports from South America. Spain
experienced a spike in these imports in the last quarter of
2009 while Portugal experienced a similar spike in the first
quarter of 2010. If the eucalyptus numbers are removed,
the data suggests that Spains imports of hardwoods from
LDCs improved slowly in the first quarter of 2010 while
Portugals imports continued to flat-line.

Imports by main supplying country
The first quarter of 2010 saw a significant reversal in EU
imports of hardwood products from China (mainly
plywood). Increased arrivals of Chinese plywood at the
end of 2009 met with stagnant demand in the European
construction sector so that importers greatly curtailed
imports during the opening months of 2010.

European (mainly French) imports of hardwood products
from Gabon spiked in the last quarter of 2009. This was
due to a rise in log imports in anticipation of Gabons log
export ban from January 2010. Although implementation
of the ban was subsequently delayed until May, the
statistics suggest that most European buyers completed
their efforts to stock up on Gabon logs at the end of 2009
and that imports were already falling away again in the
first quarter of 2010.

The first quarter of 2010 saw some minor quarter-onquarter
increases in European imports of hardwood
products from Malaysia, Cameroon and Indonesia.
However imports from Brazil and Ivory Coast remained
static at low levels.

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Abbreviations

LM       Loyale Merchant, a grade of log parcel  Cu.m         Cubic Metre
QS        Qualite Superieure    Koku         0.278 Cu.m or 120BF
CI          Choix Industriel                                                       FFR           French Franc
CE         Choix Economique                                                        SQ              Sawmill Quality
CS         Choix Supplimentaire      SSQ            Select Sawmill Quality
FOB      Free-on-Board     FAS            Sawnwood Grade First and
KD        Kiln Dry                               Second 
AD        Air Dry        WBP           Water and Boil Proof
Boule    A Log Sawn Through and Through MR              Moisture Resistant
              the boards from one log are bundled                      pc         per piece      
              together                      ea                each      
BB/CC  Grade B faced and Grade C backed MBF           1000 Board Feet          
              Plywood   MDF           Medium Density Fibreboard
BF        Board Foot F.CFA         CFA Franc        
Sq.Ft     Square Foot              Price has moved up or down

Source: ITTO'  Tropical Timber Market Report

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