More to pay. (Photo, courtesy Peter Benson.)

Plywood prices rise

Published:  22 July, 2009

MOSCOW: Lesprom Network reports that European plywood agents believe CIF plywood prices may be on the verge of ‘significant rises’.

The report said: "Inflationary price pressures seem to be mounting. Shipping lines which have been shedding money over the last few months are laying up tonnage in an effort to drive up freight rates. A long period of very low harvesting is contributing to a serious shortfall in log supplies which has increased raw material costs in major producing regions."

European plywood importers have been employing two distinct market strategies during the downturn.

The larger and better capitalised companies are trying to boost market share by selling in volume at low margins.

Others have been working from very low stocks and selling only limited volumes while trying to ensure a good margin on each sale, said the report.

"Malaysia and China are jostling for position as leading suppliers of tropical hardwood-faced plywood into the EU,” the report added.

“Indonesia is now widely regarded as a spentforce, at least in the UK market, partly due to price but also according to one agent because ‘it has not properly addressed the environmental issue'.”

Several of the largest UK builders' merchants continue to blacklist all Indonesian plywood on environmental grounds.<

The report concluded that: "The major focus on product price during the downturn seems now to be having a significant impact on the quality of plywood products supplied into the EU."

There are signs that in order to meet existing price expectations in the EU, some plywood suppliers are cutting corners with respect to log quality, glues and other raw materials.

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