Netherlands: Timber traders expect market to recover in 2006 April 20, 2006
After a very difficult 2005, some timber traders hope that 2006 will bring a recovery. Pontmeyer, one of the country’s largest timber traders, faced losses of €6.5
million in 2004 and €3.8 million in 2005. With an
economic recovery forecast in 2006, Pontmeyer as well
as other timber traders expect better results this year.
Some traders are reporting improved trade margins in the
first quarter of 2006. For instance, prices for dark red
meranti (DRM) 3x5” KD PHND, which not long ago
were as low as €620 per m3 free delivered, are currently
at above €740.
Traders and consumers are now more aware of supply
and price developments in Peninsular Malaysia. There
remains the normal aversion to higher prices with some
traders trying to knock off several euros in the
transactions. The fact is that the market panorama seems
to have improved. Joineries and end users of (tropical)
hardwoods appeared to be engaged in sufficient work
and the order-portfolios seem well filled for months
ahead. This is also substantiated by analysts from
Rabobank Nederland and the Central Planning Bureau
who expect a robust growth of over 2.5% of the Dutch
economy. The building sector has good prospects, with
analysts predicting between 70,000 and 80,000 units to
be completed this year which will no doubt lead to
increased timber consumption.
Supply problems complicate stock replenishment
There is good demand for timber both (tropical)
hardwoods and softwoods in the Netherlands. Supply
difficulties in Southeast Asia and Brazil, production
limitations in Africa and the ban on rough sawnwood
exports from Indonesia are exerting enormous pressure
on Malaysian timber. Supply possibilities of fresh DRM
are extremely limited, even for a normally common size
3x5”. Exporters have not much to offer and with limited
supply from sawmills in Sabah and Peninsular Malaysia,
an early improvement of the situation is unlikely. The
price of 3x5” KD Seraya/Bukit has escalated in a very
short period of time to record heights and limited
supplies are making replenishment extremely
complicated. This situation is expected to continue in the
second half of April. An extra pressing factor on DRM
prices is the strengthening of the Malaysian ringgit and
the Brazilian real.
With the continuous supply problems in Brazil and the
prolonged shortage of antiskid bangkirai from Indonesia,
the price of the limited quantities of selangan batu has
meanwhile exceeded the $1,000 per m3 CNF-Rotterdam
mark. Various alternative sources are being explored,
including bilinga from Africa, since the sales-season for
antiskid decks started with spring. Consequently, the
purchase price for this fine African substitute enjoys also an upward trend for the various popular thicknesses in the range 21 through 28mm and width of 145mm. A very
popular antiskid decking is the reversible profile with
channels on one face and a fine reeded reverse.
