News

01/09/2009: AVAILABILITY NOW AND FORWARD

Our last News item dated 3rd April set out the position on availability of Birch plywood and our view of the likely position on prices through the Summer months.
Whether our expectations became a reality is for others to judge !

Looking back we can say that log cutting in the frozen forests was a success but it took place when there was a tremendous surge in demand for plywood from China and also on Russia's home market. This caused prices to at least hold on to gains made previously and many Mills then bought logs in the Spring when only harvesting can take place on the edges of the forest areas due to the forest floor being too soft for heavy equipment to work.The logs harvested like this are of variable quality but can be cheaper of course.
A reduction in demand Worldwide eventually led to log stocks being reduced, production volumes decreasing and some reluctance from the Mills to produce thin boards with B or BB faces as they naturally want to sell thicker plywood with B or BB faces so as to use up the C quality for the core. Often to buy B or BB veneered plywood the Mill would insist On a high proportion of any volume contracted being in C grade.
While sanded higher grade panels held their price levels there was a fall in price for C quality.
Russian Mills traditionally close in the Summer for 3 - 4 weeks so there may be some shortages in sanded grades for the next 8 weeks.
It appears to be the case at present that the Mills are selling C grade plywood at cost or even just below and the profit is being made on higher grade panels.
As always currency can be a significant factor in the landed price in the UK as the Mills like Euros and we have seen Sterling take a battering in the last 9 months which has only increased price levels. Sea freight and inland haulage rates continue to rise as we all know.
The Mills are keen to do more business as they have almost lost their American market, the Russian domestic market is taking up more and more Birch plywood as are some of the CIS states.
We expect that the Mills will be more cautious when purchasing logs this Winter as they paid very high prices last Winter and probably committed to too great a volume.
While there is no reason to expect the domestic demand for plywood to decrease there is no great optimism that their Export markets will improve so they are likely to be reluctant to speculate given the current gloom and doom that abounds Worldwide.

It is quite possible that higher grades will not be freely available and we expect that this will cause prices for B and BB grades to rise by possibly 5% by December.
C grade prices are expected to be stable at best but we must take into consideration currency and transport costs when looking at possible levels delivered to UK sites.

Briefly on FSC questions, our factory is applying for registration. Russians by tradition do not like bureaucratic procedures and forestry and harvesting Companies are no exception. In theory the way forestry is controlled in Russia now should present few problems for FSC certification but it will take time .
As a Company we are pressing our Suppliers to comply and will continue to do so.
We should not forget that the Birch tree is such a successful self seeder and a relative quick growing tree that its future under the control of the Russian State Forestry is secure whether it is grown in the now decreasing numbers of harvested mixed forests or under controlled plantation conditions.

EUROPEAN PLYWOOD FOR EUROPEAN CONSUMPTION - DOES IT NOT MAKE SENSE !!

Technomar - not a 'run of the mill' plywood supplier.