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Wood Products Prices in UK and Europe

16 – 31th May  2023

Report from Europe  

 Slow start to the year for EU27 tropical wood imports
In the first quarter of this year, the EU27 imported 427,000 tonnes of tropical wood and wooden furniture products with a total value of US$896m, respectively 12% and 22% less than the same period in 2022. Compared to the last quarter of 2022, imports in Q1 2023 were up 1.2% in dollar value and 3.1% in tonnage terms.

After falling sharply in the second half of 2022 from the 10-year peak recorded in the first half of last year,, imports stabilised in the first quarter this year.

In the first three months this year, in dollar terms, EU27 imports of tropical wood and wooden furniture were significantly above the long-term average of around US$800m per quarter between 2012 and 2019, the period of relatively stagnant market conditions for tropical products that prevailed in Europe before the COVID crises (Chart 1a).

However, in tonnage terms, EU27 imports in the first quarter this year were below the long-term average of around 450,000 tonnes per quarter during the 2012 to 2019 period (Chart 1b).

The weak start in the European market this year is due to a combination of relatively high stocks and slow consumption. In 2021 and the first half of 2022, EU importers responded to sharply rising consumption in the European market – boosted particularly by heavy spending on home improvement and public finance to support economic recovery after the pandemic – by buying in larger volumes as CIF prices were rising to record high levels.

However, demand in Europe fell dramatically during the summer months last year with rising economic uncertainty, particularly fuelled by the war in Ukraine and high energy costs.

At the same time, global prices for wood materials and freight rates fell dramatically in the second half of last year. A big decline in global trade followed on from sharply rising interest rates in the United States and as China struggled to maintain a zero-COVID strategy and suffered a property market slump. The price of a 40-foot container for delivery into Europe from the Southeast Asia, which hit record levels in excess of US$17,000 at the end of 2021, had fallen to around US$1,500 in the first quarter of 2023.

The combined effect of these trends was that at the start of this year many European timber importers were sitting on quite large stocks bought earlier at high prices which they were struggling to shift on to their customers. The value of these landed stocks was being undermined as prices for new orders in the main supply countries were falling. Costs of holding stock and manufacturing wood products were also rising as interest rates were being pushed up and energy costs were soaring during the winter months.

The problems associated with high stocks and falling prices particularly applied to products sourced from Asia, including garden furniture, decking, flooring, and other joinery products. In the case of African hardwoods, although prices for existing landed stock in Europe have been falling as large volumes arrived last year and consumption has been slow, availability for forward orders from African sawmills in the second half of this year is restricted and prices are firm and expected to remain so.

This reflects rising overheads for African producers, driven by fuel and energy inflation, which is resulting in falling output.

Decline in EU import value in nearly all countries and tropical wood products
There was a year-on-year decline in EU27 import value for all tropical wood product groups except sawnwood and logs between January and March this year (Chart 2a).

During the three-month period, import value of sawnwood was up only marginally, by 2% to US$218m, while for logs there was a much larger 41% gain, to US$18.8m.

However, these increases were more than offset by large declines in import value for: wooden furniture from tropical countries (-30% to US$350m); tropical mouldings/decking (-44% to US$154m); tropical joinery products (-33% to US$51m); tropical-hardwood faced plywood (-10% to US$50m); tropical veneer (-19% to US$46m); tropical marquetry (-32% to US$22m); and tropical flooring (-22% to US$16m).

In terms of EU destinations, import value of tropical wood and wooden furniture in the first quarter this year was down year-on-year in all the main markets except Spain (+5% to US$59m) and Portugal (+1% to US$13m).

Import value fell 19% in France to US$180m, 8% in Belgium to US$160m, 36% in the Netherlands to US$144m, 34% in Germany to US$121m, 17% in Italy to US$73m, 17% in Denmark to US$39m, 5% to US$22 million in Poland, 33% to US$19m in Poland, and 50% to US$16m in Ireland. (Chart 2b above).

EU27 wooden furniture imports from tropical countries down 30% in the first quarter
In the first three months of 2023, the EU27 imported 74,400 tonnes of wooden furniture from tropical countries with a total value of US$350m, 30% less in both tonnage and value terms than the same period in 2022.

Import value decreased 26% to US$162m from Vietnam, 24% to US$105m from Indonesia, 41% to US$54m from India, 54% to US$18m from Malaysia, and 22% to US$6m from Thailand. EU27 wooden furniture imports from all other tropical countries were negligible during the three-month period (Chart 3).

EU27 imports of tropical sawnwood still high but decking imports down sharply
In contrast to other tropical wood products, EU27 imports of tropical sawnwood in the first quarter of 2023 sustained the relatively high levels recorded the previous year.

While year-on-year import volume was down 4% to 232,000 cubic metres, import value was up 2% to US$218m. There were particularly large gains in tropical sawnwood imports from Gabon (+22% to 45,100 cubic meters) and Congo (+34% to 27,400 cubic metres) in the first three months this year. Imports also increased significantly from a smaller base from DRC (+21% to 3,300 cubic metres) and CAR (+144% to 3,200 cubic metres).

These gains offset a decline in imports from Cameroon (-1% to 83,500 cubic meters), Brazil (-33% to 25,800 cubic metres), Malaysia (-29% to 14,900 cubic metres), Ghana (-3% to 5,800 cubic metres) and Ghana (-23% to 4,800 cubic merers) (Chart 4).

In contrast to sawnwood, EU27 imports of tropical mouldings/decking were slow in the first three months of this year. After all the work carried out on garden improvement during the pandemic, the European market for tropical hardwood decking has now slowed to a crawl. European importers are carrying heavy stocks bought at high prices last year and are not in the market for new supplies.

EU27 imports of mouldings/decking in the first three months of 2023 were 31,100 tonnes with value of US$62m, respectively down 35% and 43% compared to the same period last year. Imports fell sharply for the two largest supply countries; down 38% to 9,700 tonnes from Brazil and down 45% to 9,000 tonnes from Indonesia.

There was also a sharp fall in imports from Peru (-40% to 2,600 tonnes), Malaysia (-24% to 1,600 tonnes), and Bolivia (-35% to 1,000 tonnes). Imports from Gabon increased, but only by 1% to 4,200 tonnes (Chart 5).

In the first three months of 2023, the EU27 imported 29,800 cubic metres of tropical logs, 21% more than the same period in 2022. The most significant trend was a sharp 195% rise in EU27 log imports from Congo to 17,600 cubic metres in the first quarter this year. This surge in European arrivals probably reflects a last-minute effort to ship logs in advance of the log export ban imposed by the Republic of Congo from 1st January 2023.

EU27 imports of logs also increased sharply from Cameroon (which may be derived from neighbouring Congo or Central African Republic) in the first quarter this year, rising 83% year-on-year to 3,000 cubic metres.

EU27 imports of tropical logs from all other supply countries declined during the period including Central African Republic (-15% to 3,850 cubic metres), Democratic Republic of Congo (-62% to 1,650 cubic metres), Liberia (-58% to 1,250 cubic metres), Guyana (-52% to 600 cubic metres) and Paraguay (-56% to 500 cubic metres) (Chart 6).

Downturn in EU27 imports of tropical veneer but plywood more stable
In the first three months of 2023, the EU27 imported 66,500 cubic metres of tropical veneer with a value of US$46m, respectively down 21% and 19% compared to the same period last year.

Imports of tropical veneer from Gabon, by far the largest supplier to the EU27, decreased 32% to 30,000 cubic metres after rising sharply last year. EU27 veneer imports in the first three months of this year also declined from Côte d'Ivoire (-11% to 16,900 cubic metres), Cameroon (-4% to 7,900 cubic metres), Congo (-18% to 3,100 cubic metres), Equatorial Guinea (-2% to 2,700 cubic metres), Ghana (-50% to 1,300 cubic metres), and Indonesia (-22% to 1,300 cubic metres) (Chart 7).

In the first three months of 2023, EU27 tropical plywood import increased 6% in volume terms to 61,700 cubic metres but declined 10% in value terms to US$48m.

The average per cubic meter value of tropical plywood imported into the EU in the first quarter this year was US$775 compared to US$907 in the same period last year, a sign both of the sharp fall in prices and freight rates and the shift in product sources this year.

Imports from Indonesia, at 18,000 cubic metres, were down 10% compared to the same period last year. Imports also fell from Morocco, by 29% to 3,100 cubic metres.

However, imports increased from Gabon (+11% to 16,700 cubic metres), China (+45% to 8,000 cubic metres), Brazil (+42% to 3,600 cubic metres), Vietnam (+55% to 3,000 cubic metres), and India (+11% to 2,000 cubic metres). For the first time in many years, there was also a significant rise in plywood imports into the EU from Ghana in the first quarter this year, up from negligible levels to 1,200 cubic metres (Chart 8).

Slowdown in EU27 imports of joinery products from tropical countries in first quarter
In the first three months of 2023, the EU27 imported 5,400 tonnes of tropical wood flooring with a value of US$16m, respectively down 18% and 22% compared to the same period last year.

The consistent rise in EU27 wood flooring imports from Malaysia that began in 2020, stalled in the first quarter this year. Imports of 2,900 tonnes from Malaysia in the first three months of 2023 were 16% less than the same period in 2022. Imports also fell from Indonesia (-11% to 1,200 tonnes), Vietnam (-9% to 700 tonnes), and Brazil (-62% to 200 tonnes) (Chart 9).

The value of EU27 imports of other joinery products from tropical countries - which mainly comprise laminated window scantlings, kitchen tops and wood doors – declined 33% to US$51m in the first three months of 2023. Despite much lower prices than the same time last year, imports are low this year as many importers already have sufficient stock to meet current slow consumption levels.

In the first quarter this year compared to the same period in 2022, imports were down 10% to US$19m million from Indonesia, down 8% to US$19m from Malaysia, down 56% to US$3m from Vietnam, and down 84% to less than US$1m from China. In a potentially significant longer-term development, given efforts in the country to shift up the value chain as log exports are banned, EU imports of laminated joinery products from Congo were valued at US$1.4m in the first quarter of this year, more than double than during the same period last year (Chart 10).


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