Timber sheet materials: What's going on?

The timber market is a bit unruly at the moment, but what does this mean for the timber panels?

The market for timber sheet materials has shown remarkable dynamics in 2024. After a long period of price declines, prices have been rising steadily in the first half of 2024. This increase is influenced by various factors, both geopolitical and economic.

The influence of imports and Sea Freight

Mid-last year, Russia ceased to be a supplier of sheet materials. This loss possibly led to significant stockpiling before the sanctions against Russia came into effect. Consequently, there was sufficient stock available until the end of last year. However, these stocks are now beginning to deplete. At the same time, the transport of timber sheet materials from South America has been delayed. Sea freight prices have risen sharply, partly due to forced detour routes in the Middle East.

Adjustment of Production Volumes

The production of timber sheet materials in Europe remains reasonably stable, but producers are adjusting their production to maximise their output. Producers had relatively low margins and are trying to recover these in the coming period. This results in a cautious but strategic adjustment of production volumes.

Influence of Import Duties

A significant factor for future price increases is the near attainment of the import duties quota. This will eliminate the tax discounts on certain products and will also exert upward pressure on the prices of other wood products.

Effect of Stock Shortages

The European wood market is also experiencing uneven trends. While some sawmills report sufficient stocks, others are facing shortages. This leads to regional price differences for logs. The import and export of wood fell significantly in the first quarter of 2024, with a decline of nearly 10% for raw wood exports and more than 20% for wood imports. Scandinavian suppliers, in particular, significantly reduced their volumes due to changed calculations of roundwood availability imposed by the government.

Economic Development

A bittersweet saving grace for the market is the slow economic growth, especially in the construction sector, which somewhat curbs the price increases. If the demand in this sector were higher, prices could potentially rise much more sharply.

The Summer Months

Although the construction sector traditionally slows down during the summer months, reducing the demand for timber sheet materials, stock shortages and logistical challenges will likely have a stabilising or even slightly upward effect on prices. Producers will continue to strategically adjust their production volumes to benefit from market conditions and recover their profit margins.

It is crucial for companies in the wood industry to closely monitor these trends and remain flexible in their strategies to adapt to the rapidly changing market dynamics.

In this complex market, it is essential to closely follow developments and make strategic decisions based on the most up-to-date information. The wood industry will need to continue adapting to changing circumstances to ensure sustainable success.

At VonWood, we lie at the crossroads where production meets trade. We’re proud of being at the cutting edge of the industry, while it’s just as important to us that we maintain a deep respect for how our industry has evolved to get us here. With this in mind, we are always excited to share innovations such as those in prefabrication with you, knowing that together we safeguard the rich legacy of our trade by embracing its evolution into the future. To find the right timber for your needs, you can get in touch with us at info@vonwood.com.