No change in depressed European market for tropical sawn lumber
There is little change in the European market for tropical
sawn lumber. There is still very little forward demand for
sapele, the main commodity species, as large importers in
the UK and the Benelux countries continue to off-load
stocks at below replacement value. Due to very slim
margins, there is very limited incentive for importers to
engage in trade in this species – as one major UK importer
commented recently ‘I haven’t made any money on sapele
in over a year’. He noted that the same could be said of
sipo, although a few other lower volume species have been
performing a little better, for example iroko and framire.
Confidence has been obliterated throughout a large swathe
of the European hardwood importing trade. This combined
with continuing lack of access to credit and insurance
cover has meant that the focus is still on reducing stocks –
despite the clear evidence that supply further down the
pipeline has been greatly reduced.
There is however a feeling that prices are now very close
to the floor, if not already there. A frequent comment by
European agents is that with the so little buying for so
long, forward prices could rise quite dramatically in the
second half of the year if importers do at last turn their
attention to replenishing their depleted stocks.