05/04/2018 - Why are timber prices increasing?
This is probably the most often asked question from our customers in the current market.
There is no single simple answer unfortunately which means there is no single simple solution. The biggest problem at the moment is that there is not enough timber to satisfy the current demand. Prices have been rising for two years and initially this seemed to be driven by the devaluation of the pound which increased imported prices which led to higher demand on UK timber which in turn increased prices.
Britain’s increased competiveness in the export market has also increased demand for suitable materials to pack these exports, namely timber and plywood. Worldwide demand for timber and sheet material is high which adds to the shortages.
There are other underlying issues relating to the number of trees being felled and the long term move away from spruce forests to native deciduous forests and heathland which are seen as environmentally beneficial but take away supply from the timber industry.
In the medium term we expect to see prices continue to rise and this will last until the economy, supply and demand all rebalance.
The chart shown above is an extract from the Poyry Price Index which is independently produced and shows the movement in home grown packaging timber. Unseasoned timber has increased by over 45% since Q1 2016 according to this index.