{"id":80557,"date":"2021-04-12T08:53:11","date_gmt":"2021-04-12T08:53:11","guid":{"rendered":"https:\/\/tin.happy-projects.ro\/rising-freight-rates-adding-pressure-plywood-market\/"},"modified":"2025-09-19T08:55:06","modified_gmt":"2025-09-19T08:55:06","slug":"rising-freight-rates-adding-pressure-plywood-market","status":"publish","type":"post","link":"https:\/\/www.timberindustrynews.com\/ro\/rising-freight-rates-adding-pressure-plywood-market\/","title":{"rendered":"Rising freight rates adding pressure on the plywood market"},"content":{"rendered":"
\n

A key concern in the plywood sector is soaring freight rates, notably in containerized trade. With global container distribution disrupted by the pandemic, shippers out of Asia have been naming their price. Importers report five and six-fold rises over the last six months, some even more.<\/em><\/p>\n

While Chinese hardwood plywood suppliers are reported to have generally returned to pre-pandemic production levels, some manufacturers in Indonesia and Malaysia (despite EU+UK imports from the latter rising in 2020) are reported to still to be struggling. \u201cOne of our leading Malaysian suppliers is still only at 50% of normal production due to safe distance work practices and so many staff being in isolation,\u201d said an importer.<\/p>\n

Another said that increased competition from US buyers was adding to supply difficulties out of Asia. \u201cIt\u2019s partly because of the boom conditions in US construction, and also some American buyers having diversified their supply base away from China to other Asian producers during the trade dispute,\u201d they said.<\/p>\n

Asian manufacturers\u2019 prices overall are reported up around a further 10% in 2021. This is partly in response to growing demand, in domestic as well as export markets, but also to an extent poor weather disrupting log supply.<\/p>\n

And, of course, adding to inflationary pressure on sales prices are the surging freight rates from the region. A hardwood importer reported being quoted as much US$15,000-US$16,000 on containers out of Indonesia.<\/p>\n

European plywood producers don\u2019t seem to have come across those levels but are now generally facing rates of US$7000-US$8000 from China and US$8000-9000 from Malaysia and Indonesia.<\/p>\n

\u201cThat compares with between US$1500-2000 last October,\u201d said an importer. \u201cWhile the market has been absorbing price inflation recently we can\u2019t sustain this sort of increase long term \u2013 and if prices go much higher we could be in a very difficult position.\u201d<\/p>\n

The situation has prompted many importers to switch wholly or partly to breakbulk, citing costs out of Asia of US$90-100\/cu.m to EU and US$100-110\/cu.m to UK ports, compared with US$135-150\/cu.m for containers. However, said one, this is not necessarily a straightforward alternative.<\/p>\n

\u201cFor one thing, breakbulk shippers are now at capacity, with services heavily booked, and they\u2019re responding to increased demand by raising their rates,\u201d they said. \u201cIn addition, you have to be shipping large volumes to make it most cost effective, which for us is OK from China, but more difficult from Malaysia and Indonesia. The alternative is to piggy-back on other cargoes, which can be complex.<\/p>\n

Shippers also want payment the moment the vessel is loaded, breakbulk delivery tends to be slower, then you may find customers don\u2019t want to take this sort of volume all at once. They wouldn\u2019t want ten containers in one go, but perhaps ten over six weeks. Similarly, they wouldn\u2019t want an entire break bulk load. So then you\u2019re into issues of storage and you could find yourself financing a shipment for three to four months. That\u2019s a drain on cash flow you shouldn\u2019t underestimate.\u201d<\/p>\n

Risk if container rates fall quickly<\/strong><\/p>\n

Importers agree a container rate correction will have to happen. The critical questions are when and by how much. \u201cWe can\u2019t see things changing for two to three months, then we\u2019ll be into our July\/August peak buying season, exacerbating the situation,\u201d said one importer\/distributor.<\/p>\n

\u201cAs much a worry as freight rates continuing at current levels, or rising further, is a sharp and sudden correction\u201d said another trader. \u201cAt the moment, due to the tight and uncertain supply situation, customers are placing forward orders to July, August, even September.<\/p>\n

If rates drop rapidly, some businesses could be looking down a deep dark hole. Big stockholding importers and distributors especially could be faced with very painful depreciation levels. So managing stock right now is difficult and taking long-term positions very risky.\u201d<\/p>\n

The birch plywood trade has its own issues. A rising wider plywood market, plus raw material shortages have prompted Russian producers to increase prices this year by 20%-25%.<\/p>\n

\u201cThe mild winter impacted the harvest resulting in mills running short of particular qualities, and now we\u2019re into spring, the situation is expected to become even more difficult,\u201d said an importer. \u201cIn addition, due to demand for construction lumber, we\u2019ve seen some shift of harvest from birch to pine.\u201d<\/p>\n

Underlining the stress in supply, one Ukrainian mill was reported to be asking customers to submit orders and specifications, then pitching one bidder against another.<\/p>\n

Also hanging over Russian plywood is the prospect of EU anti-dumping duty. \u201cIt\u2019s creating a lot of uncertainty as we don\u2019t know yet whether it will happen, when or how much it might be,\u201d said an importer. \u201cWe\u2019ve warned customers that we may have to put any retroactive duty on their account and, obviously, the further ahead you buy, the greater the risk. The result has been a rush on birch plywood for delivery by May or June and added price pressure.\u201d<\/p>\n

There are stresses too in the softwood plywood market. Prices on French, Russian, Scandinavian and Chilean are all up and delivery times are now stretching into September\/October. More recently Finnish has risen 8% and Eastern European 20%+. Some suppliers are also reported to be adopting hard-nosed sales tactics.<\/p>\n

\u201cOne Belarusian producer has cancelled all outstanding orders twice in the last three months and told clients they have to pay a new price or lose their shipment,\u201d said an importer. \u201cThis is previously unseen behaviour and puts a lot of importers in a very difficult situation because they, of course, have commitments to their customers.\u201d<\/p>\n

The sharpest price rises have come in Brazilian Elliotis, fueled partly by curbs on production due to the pandemic, but mainly by surging US demand. \u201cPrices have doubled since October to US$400\/cu.m. Effectively US buyers have priced it off the European market,\u201d said one importer. \u201cAnd the trend is still upward. Recently we heard US$450\/cu.m being quoted.\u201d<\/p>\n

In response to the intense demand for softwood plywood from their regular sources, some European companies have started opting for Chinese product instead. \u201cIt\u2019s not the same quality, but it\u2019s available and cheaper,\u201d said an agent\/importer.<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

A key concern in the plywood sector is soaring freight rates, notably in containerized trade. With global container distribution disrupted by the pandemic, shippers out of Asia have been naming their price. Importers report five and six-fold rises over the … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":61824,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[4716,4715,4714],"tags":[3351,4366,3256,3286],"class_list":["post-80557","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-trends","category-market-analysis","category-wood-industry-prices","tag-market","tag-ocean-freight","tag-plywood","tag-prices","topic-wood-based-panels","area-australia-and-pacific-region","area-china","area-europe","area-north-america","area-russia"],"acf":[],"yoast_head":"\nRising freight rates adding pressure on the plywood market - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/rising-freight-rates-adding-pressure-plywood-market\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Rising freight rates adding pressure on the plywood market - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"A key concern in the plywood sector is soaring freight rates, notably in containerized trade. 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