EU - Tight tropical hardwood supply balanced by low

Supply of African tropical sawn hardwood sawnwood is now very tight, with lead times for new orders in Europe often extending to over 4 months. This is partly due to long term reduction in capacity as many mills were closed during the financial crises in 2008/2009.
However, the situation has been made worse by shorter term factors including heavy rains during 2010, on-going efforts to tighten governance and reallocate concessions in some countries, increased diversion of product to the Asian market, and the political situation in Cote d’Ivoire. This last factor, which has led European shipping companies to avoid calling at Cote d’Ivoire ports, has resulted in particularly short supplies of iroko and samba sawnwood. Due to low levels of purchases last year, existing landed stocks of tropical sawn hardwood in Europe are at historically low levels. However, the tight supply situation continues to be balanced by relatively low tropical hardwood consumption in Europe. There has been a minor increase in orders by European importers this year in order to fill gaps in stock. But overall stocks are reasonably well balanced with demand and importers are still able to satisfy customers’ requirements for most standard products at short notice.
Market conditions for tropical sawnwood vary widely across the continent. While confidence has been rising in Germany, uncertainty continues to be the prevailing sentiment across much of the rest of Europe. This is particularly true of Spain where recent reports suggest more bankruptcies in the hardwood importing sector and extremely low levels of production in the door and other wood-based manufacturing sectors. Hardwood demand in the UK is variously described as “difficult” and “patchy”, while the Irish market remains dull. Italian importers are still cautious in the face of uncertain economic and political conditions and are tending to shift away from tropical hardwoods in favour of raw materials which may be more readily sourced at short notice. Source : ITTO Market report