Buyers facing longer lead times for timber

Buyers facing longer lead times for timber

BLOG · BY NICK BOULTON, HEAD OF TECHNICAL AND TRADE · 19 October

In common with most of our members, the TTF has been receiving numerous calls and requests relating to the current supply situation. As such, we thought we would provide an update. This coincides with briefings we are also providing for the Construction Leadership Council and the market more widely. 

In recent years, the UK wood supply chain has been characterised by very short lead times with full stocks of materials available in the UK for immediate sale. This was particularly true in 2019 with significant stock build around abortive Brexit dates. This was the position as we opened 2020.

The COVID-19 situation has completely reversed this position with the wood supply chain now empty and characterised by long lead times and little or no stock available in the UK for immediate sale. This means buyers with longer term purchasing strategies in place such as manufacturers, housing contractors, major project contractors and merchant chains are getting allocated stocks arriving regularly as scheduled.

Buyers with shorter term purchasing strategies will struggle to locate or obtain immediate supplies and will need to work with their chosen suppliers to fulfil future requirements.

The import statistics for August 2020 show arrivals in the UK across all product groups are the same as those for August 2019. Indications are this will be a similar position for September and October. UK / Irish sawmills and wood-based panel manufacturers are working at or near capacity, but have significant lead times similar to imports of the same product category.

Lead times vary significantly across the product groups although granular detail is difficult to obtain due the complexity of supply webs in our sector:

• Decking and Fencing – remain the longest lead times as require further processing to UK or imported wood and limited treatment capacity is available in the UK.
• General carcassing & PAR / Structural timber / CLS – 40% from UK & Ireland/ 60% Imported – This is the main area for concern as lead times for new orders from both sources have extended during September and into October.
• Engineered wood products/ I Joists / Metal Web Joists/ CLT / Glulam – special-order products minimal additional lead times.
• OSB – UK production and imported products are presold with stocks on allocation.
• Structural Plywood – Longer lead times most products on allocation.
• General Plywood – Stocks available on shorter time frames.
• Particle Board flooring – Good supplies short lead times.
• MDF – Good supplies short lead times for general product, longer for specialist products.
• Joinery Softwoods and Hardwoods – Stocks available on short time frames.

Assuming we see some stabilisation of global demand particularly a reduction of heat in the US housing sector then forecasts suggest the UK supply situation will improve by end of Q1 2021. We do not believe Brexit will significantly impact wood supply chains directly, this is because:

• Only minimal volumes arrive via south east RORO ports.
• Few wood products require JIT management of supply chains or specialist storage.
• Main volumes arrive on dedicated vessels utilising a range of different ports throughout UK.
• Customs processes linked to large volumes not individual containers.
• Significant volumes of wood product are UK produced.

There may be indirect effects such as the availability of HGVs for UK transport, but these are outside of the sectors control and if they come to pass, wood supply is likely to be the least of the UK problems.

From a main contractor perspective, the supply of CLT, Glulam, probably presents the highest Brexit risk as all products are imports, often on a JIT basis. Early arrival and temporary storage in the UK are realistic methods to manage this risk.

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