What is going on with wood prices right now

[sometimewoodworker]

I'm tempted to buy loads of redwood pine now as an investment and then sell it on at the end of this year.

You need :
Transport to storage (cheap?)
Storage space (cheap?)
Transport from storage (cheap?)
Guaranteed customers
Loads of cash
Clairvoyance that the price increases will be greater than 1+2+3 and that 4 will pay that much

If you’ve got all of that then it’s a good idea

 

[Jameshow]

My clairvoyant has just phoned to let me know she's not working today due to unforseen circumstances....

Cheers James

 

[danst96]

Its not an issue limited to UK and its not a straight forward issue of supply issues or just demand. Its incredibly high demand paired with severe supply issues which massively amplifies the problem. I was talking to a builder in Canada and he said last year they had 20 new builds for the entire year. They had had 80 orders for new homes in March alone apparently. That mixed with the cost of OSB increasing from $20 a sheet last year to $80. I had planned on building a new home there, guess i am screwed then.

Do you think prices will come down at all? If suppliers are trying to slow down demand by massively inflating their prices, surely that can only be sustained for so long before it causes issues?

I think governments also need to put the interests of their population ahead of the interests of the profits of some companies as a lot of issues stems from companies sending wood to the highest bidder, often China. 2020 has really made me dislike China a lot.

 

[sometimewoodworker]

Do you think prices will come down at all?

Of course they will. But when is a much more difficult question.
There has been some downward movement on some species in the USA recently.

If suppliers are trying to slow down demand by massively inflating their prices

They are not. It is called capitalism!
Prices go up when demand is high and supply is low, as it is now.

Prices adjust to the point where demand matches supply.

If you artificially lower prices then the supply will completely disappear as stock will be exhausted at the prices you set.

I think governments also need to put the interests of their population ahead of the interests of the profits of some companies

It is not the government who produces the material, which is limited at the moment.

a lot of issues stems from companies sending wood to the highest bidder,

Why should companies not make as much money as they can?

Do you want to live in a communist society now!

 

[danst96]

Im not saying that prices should be artificially lowered. Of course price goes up with increased demand and limited supply, this is simple economics. What i mean is in some wood producing countries (including UK to some extent) their own supply of wood is being prioritized to foreign buyers. This is nothing to do with government, as you say, in a capitalist system it is entirely up to anyone to do this however it is resulting in the domestic market being stretched to breaking point and what I am trying to say is it may be in the governments interests to "encourage" suppliers to focus on the domestic market during this crazy period. Not only would it be supporting its own citizens but it would also keep more money in the country. Then again this could be a flawed argument especially from a Brit as we import most of our timber.

 

[sometimewoodworker]

what I am trying to say is it may be in the governments interests to "encourage" suppliers to focus on the domestic market during this crazy period. Not only would it be supporting its own citizens but it would also keep more money in the country.

The way that governments do that is by tariffs or export duties/restrictions. They often take a considerable time to bring in and then as often as not backfire as the Americans found with the duty on Canadian timber, yes it’s the reverse of what you want, but it shows just how difficult things like that can be.

 

[peter-harrison]

I have just got a pile of melamine faced MDF, standard MDF and birch ply. The supplier (Timbmet) said price rises are driven by Brexit, Covid and the US market. Apparently, the Americans are buying more melamine faced MDF these days, which has led to factories being switched from producing standard to melamine, which has led to melamine now being cheaper than standard! Crazy, huh?

 

[Jake]

US 'Lumber' futures now 42% from May's peak, lots of the speculative buying being sold down to cut losses.

https://www.nasdaq.com/market-activity/commodities/lbs

 

[clive griffiths]

I was in selcos today, told me their timber is going up 40 % from July.

 

[Sandyn]

It's not only wood. I just got a quote for my annual restock of metal. Wow! was that a surprise. Average of 30% increase, but steel prices tend to be volatile.

 

[topchippyles]

I was in selcos today, told me their timber is going up 40 % from July.

Glad i mill my own clive and a 40% rise is crazy

 

[dannyr]

Read the same news (different source) as Jake, above --- mills have caught up with demand in US and prices of construction grade now going down fast -- many hoping to profit by stocking have got their fingers burnt.

That's US not UK/Europe, but have a deep pocket if trying to beat the market.

 

[CaptainBudget]

It's not only wood. I just got a quote for my annual restock of metal. Wow! was that a surprise. Average of 30% increase, but steel prices tend to be volatile.

I work for a steel fabricators, cost price of structural mild steel has nearly doubled in the last 12 months and some common section sizes have become like hen's teeth.

Mills shut down worldwide due to pandemic, and were slow to start back up. Demand has spiked massively in the last 3 months leading to a perfect storm of high demand and low availability. Many plate Decoilers have sold incoming stock as far ahead as October/November which is crazy...

 

[matkinitice]

Interesting read here, just download the pdf.

TTF Market Statement May 2021 - Timber Trade Federation

Timber Trade Fedaration

 

[Nick.]

Interesting read here, just download the pdf.

Interesting thanks for the link, and the comment below from that report applies to many other products / retailers now I'm sure.

"• Those less able to hold stocks or less willing to plan their needs in advance were unable to spot-purchase quantities: this was a particular problem for builders’ merchants, whose purchasing strategies and stock-holding patterns have only now begun to adapt to the new reality."

Regarding machinery, one of my customers said to me the other day "If you have it, you can sell it". They were sharp and forwarded ordered quantities with storage facilities where as others are now facing delays of 6 months for certain machines as they are all pre-sold until then.

 

[Sandyn]

The price for my steel restock made me have a look on the internet for a cheaper source than my usual supplier. I made up my list on Friday, but had to check some sizes for a gate I'm making. I took a snapshot of the order, because the site wouldn't save my basket. Went to place the order today and the cost has gone up since Friday!!! lol about another 1% on a £300+ order

 

[Nick.]

The price for my steel restock made me have a look on the internet for a cheaper source than my usual supplier. I made up my list on Friday, but had to check some sizes for a gate I'm making. I took a snapshot of the order, because the site wouldn't save my basket. Went to place the order today and the cost has gone up since Friday!!! lol about another 1% on a £300+ order

1% is what it is on that order maybe and fair play in just a day that's no issues, but factories we deal with now say...

• Frames for saws – 43%
• Sheet metal – 100% - US and EU can hardly get it from China. Export from Tw increased by 89% in Q1. Woodworking machines are not the priority
• Copper – 80%
• Aluminum – 30%
• Card board – 25%

If inflation doesn't start to rise in UK I will be v suprised.
Cheers all

 

[Phil Pascoe]

Saturday I paid nearly £25 for 2 x 2.4m 3" x 2" CLS. (I could have hunted around, but needed them in a hurry.)

My wife works for a small Swedish bank - they have been warned to plan for negative interest rates. I wonder if/how that will affect inflation.

 

[clive griffiths]

I was told last week by a large merchant that 18mm sterling board will hit the £50 a sheet shortly 11mm sterling board is £28 at the present ( i have started to buy all my timber for my new workshop that i am starting to build in September).
Talking to a retired bank manager and he says possible inflation going up and a recesion to follow it,

 

[stuart little]

Even balsa wood is affected. It took me most of a day to eventually find some 1 & 3' lengths of 50 x 100mm blocks. at a reasonable price , avoiding the usual ebay rip-offs. Us modellers are being hit too. 90% price increase is quoted. The Chinese are snapping up as much as they can from PNG to meet the demand in core or end grain production that's used in wind turbine blade manufacture. The shipping co's have a lot to answer for. One load destined for Felixstowe couldn't be unloaded, so the ship continued to Rotterdam, to unload, the UK stuff had to wait to be shipped back to UK at the shipping co's Emergency Export Surcharge of $10000/40' 'Tin Box' !!!!!!!!!