Chinese Demand Hits Home

Related entries: Corporate News, General, Trading

Much has been said about China buying up supplies (and forcing up the price) of metals, fuels, and other commodities, but now it is timber that is (with apologies) in the frame.

I was turned onto the story by my building contractor, Dave, who is doing some work at my house. He told me there would be a delay on the job because none of the local timber yards had any…timber. He blamed it on China.

I was somewhat skeptical (after all builders have a lot of excuses up their sleeves, and lots of people love to blame China for their woes), until I read the same thing in the FT today.

    “The British Timber Trade Federation estimates inflation was about 20 per cent last year, while dealers say the prices of sawn softwood have risen 30 per cent in the past six months…recent figures from the United Nations show that China has become “the number one importer of softwood and hardwood logs”. “China seems to be consuming mind-boggling amounts of wood right now,” says David Sulman, of the Scottish Timber Trade Association.”

The FT confirms that this Chinese demand has caused sourcing problems for UK retailers such as B&Q, while the silver lining, for Swedish timber companies such as Bergs Timber and Roervik Timber, is that their share prices have risen to record levels.

In the end Dave did get my wood. But it wasn’t cheap! It was however a reminder of the size and power of the China market, and the fact that what happens over there can have a direct impact over here – in my house, and not just in the pages of the FT.

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