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Q3 2021 to be ‘biggest challenge structural wood sector and its customers have ever faced’

THE head of technical and trade at the Timber Trade Federation (TTF) has warned in a blog that Q3 2021 will be the biggest challenge the structural wood sector and its customers have ever faced.

Nick Boulton says: ‘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’s now sufficient information to support this assessment.’

In terms of construction, Sweden is the UK’s single largest supply source providing almost half of the structural wood that is used in the UK. The TTF says it has great respect for its Swedish partners who it praises for having consistently worked throughout the pandemic to meet UK wood needs.

This means, says Nick, that 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 stocks 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 almost all wood arriving in 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, says Nick. This situation has been made worse because there are insufficient HGVs available to get the wood out of UK ports and into UK customers’ yards.

‘As we enter July, sawmills and wood 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 wood for the UK. In order to maintain the supply chain during this summer shutdown period, there has previously been a significant reliance on Swedish sawmill stocks.’ However, if these stocks are now at their lowest level for 20 years there won’t be sufficient supply to satisfy UK structural wood demand in Q3. Although prices have risen substantially from an artificially-low point towards the end of 2019, they’ve now exceeded the levels of 2018, and are set to increase further as the current supply situation significantly worsens.

‘The TTF has been warning since the beginning of the year 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, the TTF urges manufacturers to consider the following actions:

  • Regularly communicate with your suppliers, as the situation develops over the coming months
  • You should communicate early with your clients of any potential price rises, and long lead times, using the information produced by the TTF where necessary in these discussions
  • Make sure orders are being placed well ahead of time and planning for any potential cost increases when setting out the cost of a project. Where possible seek earlier agreement of orders with clients to reflect longer lead times.
  • Aim to work collaboratively with your suppliers and be as flexible as possible with the specifications and quantities required.

Nick concludes: ‘If there are any doubts that ALL construction materials are facing the very same issues we would urge you to read the latest product availability statement from the construction leadership council on its website.’
www.ttf.co.uk

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