W.L. West & Sons Ltd.
Timber Talks - December 2009

The Last trading of 2009

December has proved to be a difficult month. Well I guess we all thought it would be.
The season of good cheer in trade is a faint murmur, perhaps this is all humbug, as the team here keep saying be positive, upbeat. Looking forward let’s put the past behind us. 2009 has been a year of turmoil and change. The Highlights there were a few, but ‘too few to mention’, but we are still here fighting our corner. The trade is still in a position of over capacity and with the reduction of imports it makes all the traders fight for what little there is. We have seen traders go out of business this year and insurance companies cut cover on our customers by unfair amounts, we would suggest.

Some traders have been dumping stocks in December where there has been a need to pay for imported hardwoods such as Sapele and Idigbo. Cash requirements are huge at the moment for all of us, traders and customers alike.
On the forward market, Sapele, Utile and Idigbo, all African species, are firming up in the early part of the year. This on a replacement stock basis does not make sense.

One hardwood trader that went out of business in November has changed the nature of the trade yet again, by reducing the E Oak market to even more of a common commodity. European companies now are taking slices of the UK traders’ market share and servicing supply from far afield. The price may look attractive but quality issues and problems are not easily solved and there is an unfair amount of lateness in deliveries. The price may be an advantage but the service side is not.

The English round timber trade is also dysfunctional, mainly as a result of the Forestry Commission. It has been reported that with the drop in imports to the UK traditional manufacturing businesses are on the decline. However, bespoke niche markets still exist and perhaps this is where the ‘light’ is on.

This still sounds gloomy and despondent. However, we are poised for 2010 and surely it cannot be any worse than this year.

We hear that the euro may weaken in the New Year which may help, we thought this may have occurred earlier in the Autumn, but it recovered somewhat. There is still some distance to go.

We tend to follow the dollar. With Ireland, Greece, Italy, badly under performing and underpinning what seems the rest of Europe, this may start to attract the currency market in the UK.

Stock News

Softwood imports are down as a result of pulp mills closing due to over supply. Everyone who buys softwoods will realise the issues caused by the problems in supply, and with shortages the costs have been steadily rising. However, we have been lucky so far with the mills we have been purchasing from. The UK softwood imports from January-September were down 20.3% compared with a year ago, according to the latest statistics released by The Timber Trade Federation.

Panels imports were down by 32%, with all timber imports 24% down on last year. The cumulative softwood volume for the nine months was 3.65 million m³, down from 4.58 million m³ a year ago. Sweden’s market share increased to 55% of all UK softwood imports during the period, followed by Finland (12%), Latvia (10%), Germany (6%) and Ireland (5%). Imports from Ireland increased by 20,000m³.  Hardwood imports fell 16.6% to 271,000m³, with the US’s leading market share of 24% falling 3.8% but still comfortably ahead of the next biggest exporter to the UK, Germany, which had a 8.7% share.

In the period 2004 – 2008 there has been a downturn in hardwood imports into the UK by 44% by volume.

We have seen the rise in wood burning for fuel in domestic situations and in industrial plants. Energy is one way forward for the future. We learnt that one established company in the south makes more money in recycling and chipping timber to sell for burning than timber trading, now another third generation home grown mill that is based in the North East is also putting a plant in to chip for domestic and industrial use with pet litter and fuel being the new growth area of their trade. At the recent annual timber auctions there was some very expensive fuel wood bought for what is thought to be part of a supply contract with little margin to get out. Beech woods with medium -good size diameter stock to be felled for fuel.

We thought at one stage a life line to the trade was the certification route, and this seems to be picking up. By all recent accounts published in the TTJ recently it is up by 25% on last year. This is to enable more timber to be sold justifiably with a chain of custody legally audited. Talking of which, one of our team here is bemoaning the red tape bureaucracy in a recent audit which costs an unfair amount of time and a lot of internal work.  Who else is getting a premium for selling FSC / PEFC timbers? - Not us !

Looking to a bright 2010

With the snow still all around, and the pub calling  us in for the end of term beer……
Its down to saying a big thanks for all those customers who have supported us during 2009 its’ been up and down like a fiddlers elbow. We are truly grateful for the work we have done. Let’s do more in 2010. Do have a good new year and next year make it more positive.

Wishing you all a Very Happy New Year

W.L. WEST & SONS LTD
Selham, Petworth, West Sussex GU28 0PJ
United Kingdom

Tel: 01798 861611   
Fax: 01798 861633   
E-mail: sales@wlwest.co.uk