Elevated imported timber prices, which more than doubled during the pandemic to add severe cost pressure on builders and homeowners, have begun to ease, with supplies now also more plentiful and alleviating recent shortages of the building material. Source: The Advertiser
Australia’s construction industry sources as much as 20% of its timber from overseas and industry experts believe that, while it only makes up a minor proportion of all the lumber used domestically, moderating prices for imported timber should flow through to prices for local timber too.
Mike Barry, chairman of Natbuild, the nation’s leading independent hardware buying group, said there had been a noticeable easing in timber prices recently as well as a strong build-up in available timber stock, which hardware companies were starting to feed into the market.
“Imported timber is coming off from the peak, so we are seeing declines in imported timber prices,” Mr Barry said.
During the pandemic a combination of dislocated global supply chains, bushfires in North America and Australia and later the war in Ukraine strangled the availability of timber, with prices in the northern hemisphere surging as much as 400 per cent.
Timber prices in Australia didn’t rise as much as in other markets, such as the US. But they did still rose as much as 200 per cent, with the lack of supply compounding the pain for house builders and house owners. As the pandemic pushed into 2021, timber prices became scarce or too expensive, or both, squeezing profit margins for builders and delivering bill shock to their customers.
Mr Barry said declining imported timber prices should help reduce the overall cost for all timber.
“Imported timber has traditionally been a higher cost than domestically sourced timber, and more recently it’s been significantly higher. So yes, ultimately there will be some flow through to lower prices as imported timber prices moderate,” he said.
“We are seeing a build-up in stock holdings of timber, which would help supplies and lower prices. Timber companies now have increased comfort about access to supplies.”
The demand for timber in Australia during the pandemic was further fuelled by government funding for home building, with a housing boom last year putting more demand pressure on timber and further elevating prices.
The leap in timber prices added tens of thousands of dollars to the cost of a newly built home and there were reports of thieves pinching timber, as well as other commodities such as copper wire.
The timber shortage and price rises influenced some retailers to make their own investments in the sector to better cope with supply chain bottlenecks. Hardware retailer Bunnings over the next 18 months will seek to double the number of processing plants it owns that manufacture wooden frames and trusses for home building.
