The global timber market is currently navigating a complex landscape marked by a combination of geopolitical tensions and economic fluctuations.
The UK is the world’s second largest net importer of forest products, importing more than £10 billion worth of timber and timber products in 2023, with only China ahead in net imports.
Approximately 81% of the UK’s timber is sourced abroad, highlighting its dependency on international supply chains and so the recent uncertainty created by the aggressive trade policies of the new US President will undoubtedly be felt across the global market.
The US administration’s proposal of a 40% tariff on Canadian lumber, citing unfair subsidies, is threatening to disrupt traditional supply chains, potentially compelling Canadian producers to seek alternative markets, including increasing imports into a European market where demand remains at historically low levels.
How the newly announced tariff regime may impact timber supply in the UK is yet to be seen but the measures will undoubtedly significantly reshape global wood trade flows as some countries potentially shift their focus away from the US market – while others, less affected by the new tariffs – could seek to expand their exports into the US.
As well as the uncertainties around the global market going forward, the forthcoming implementation of EUDR, while underscoring the EU’s commitment to sustainable sourcing, could reshape trade relationships and have a significant impact on global supply dynamics.
Beyond the US
The UK imports timber from a range of global sources including the US, China, Sweden, Latvia and Poland with the majority of the UK’s sawn softwood – used for timber pallets and packaging – coming from Sweden, which is currently experiencing unprecedented challenges due to low market demand.
In February, Vida Wood and Sodra, two of Sweden’s largest operators, announced that they were temporarily closing all their sawmills due to the insufficient supply of log wood, driven by a combination of high log prices, reduced availability of log wood and poor conditions for harvesting.
This move to slow down output is an attempt to drive up prices of sawn wood in line with log prices, which have doubled in price over the past four years.
Positive economic signs
While much-needed growth in the UK economy remains elusive at present and there is uncertainty around the impact of the new US tariff regime, the recovery in the UK timber market is continuing with import volumes finishing 2024 0.5% up on the previous year, boosted by a particularly strong final quarter of 2024.
There are certainly signs of encouragement in terms of the economic outlook, not least by the prediction that the European pallet market is set to grow by $7bn over the next five years, driven by an increase in trading activity across the continent.
The UK timber market is also set to experience a significant boost in the coming years with the launch of the Government’s Timber in Construction roadmap, which seeks to increase the amount of domestic timber to support both its housebuilding aspirations while also providing domestic timber for use outside of the construction industry.
With car registrations on the rise and defence spending set to increase, the future signs for these key sectors is beginning to look more positive with a healthy manufacturing sector essential for a wider economic recovery.
Amid the combination of trade tensions, fluctuating supply and overall economic pressures, we continue to employ a range of proactive strategies to ensure that we are maintaining our own reliable and sustainable timber sources to ensure that we can continue to successfully navigate this volatile global landscape.
