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Friday analysis: timber supply is a challenge all over the world

The demand for timber for houses in particular is on fire. And it’s not just in Australia; it’s worldwide. In the United States prices have gone up 300% or 400%. The Canadian supply is going down fast. Source: Bruce Mitchell for Timberbiz

In Australia sawmills have greatly increased production by adding shifts and are running flat out to feed a market ignited by the incredibly successful HomeBuilder scheme.

Some, according to Ross Hampton at the AFPA, are producing up to 40% more timber than this time last year.

John Bowen from Bowen Timber in Melbourne in a note to trade customers this week said that Australia’s detached housing and renovation markets are experiencing their strongest ever rebound.

This, he said, had presented the industry with many challenges and when combined with “restrictions in world shipping, 2020 bushfires, global manufacturing slowdowns due to the pandemic, increasing worldwide demand for wood fibre and a +400% growth in US lumber prices”.

It is he said, “hard to forecast when this craziness will end”.

“The volumes of supply have remained at 2020 levels while building activity has grown substantially in Australia and around the world. Timber availability is definitely an issue, with engineered wood products in a more critical state than structural pine framing. Very tough for all who are associated.”

The market’s constrained access to timber products, particularly structural pine and engineered wood (specifically LVL & I-Joists), head the list of concerns.

Unpredictable supplies of Australian hardwood decking, glulam beams, plywood, primed treated pine mouldings, fibre cement and cypress pine are adding to the turmoil.

The building industry does face some significant challenges.

So, the news out of NSW’s South West Slopes forestry region around Tumut and Tumbarumba this week that salvage work from the bushfires had come to an end had two sides.

On a positive note, it is admirable that such an a huge volume of fire-damaged sawlogs – around 2.7 million tonnes – has been recovered in such a short time and was available to feed the hungry housing market.

Unfortunate, but inevitable, that Forestry Corporation has now had to reduce contracts for timber harvest and haulage and supply over the coming five years while replanting and regrowing for the future.

But even here there is something of a silver lining; All the contracts for future work have been awarded to local companies already operating in the area.

It has been a turbulent 12 months or so for the timber industry at all levels.

And it looks like the turbulence will continue for a bit longer.