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About EGGER> Forestry> Forestry News> Timber Prices 2019

Timber price roller coaster ride

Published: 14/06/2019
 Timber Price Roller Coaster Ride
What a change 12 months have made in the UK timber market. In June of 2018 demand was high, prices were rising and records were broken. This continued throughout 2018. However, summer 2019 has brought a very different market with prices having reduced significantly in the last six months.

What is the evidence and where next for the market?

The Forestry Commission Standing Sales Index rose by 30% in the year to March 2019 (following the same rise in the previous year). However, evidence from the market shows a significant fall in prices since late 2018, probably wiping out most of the 2018 gains.

A number of factors have come together to lead to this change in sentiment with the largest being oversupply in Europe following storm and beetle damage. This has put relatively cheap sawn material into the UK market and downward pressure on prices. There was also some stock piling at ports in anticipation of Brexit related trading issue (anticipated in March 2019) and this material is also now trying to find a home in the UK market.

For woodland owners, this means that standing timber prices for spruce clear fell on typical sites in south Scotland/north England have dropped from £50-65/tonne to £40- 50/tonne. These are still good prices in historic terms and for clients with 40 year old crops this could equate to some £20,000/ha of clear profit at clear fell.

Saw logs are proving difficult to move from site at present and roadside stocks are often high. Additionally, some parcels of timber have not been sold as sellers failed to get a price they deemed acceptable.

Where does the market go from here?

When a market moves into a sudden period of over-supply prices can fall dramatically. Eventually some stability returns and we think this will happen as 2019 progresses.

Long term demand is predicted to rise significantly. If we are to tackle the climate crisis we will need to use a lot more wood and a lot less concrete. However, short to medium term there are a host of factors affecting price including economic activity, housing policy, European beetle damage, USA/China trade disputes, Brexit, etc., etc. All of which means that while the long term outlook is strong prices, the short to medium term is difficult to predict with much confidence.