TIMCON warns of supply chain cost pressures

The Timber Packaging & Pallet Confederation (TIMCON) has warned pallet manufacturers are facing significant increases in the cost of raw material costs passed onto them, pushing prices up for uses – in spite of a currently depressed market.

The organisation, which represents pallet manufacturers and repairers in the UK and Ireland, has advised of several variables which are causing these increases - none of them related to demand. These include:

• A depressed construction industry - particularly in the housing building sector – which has seen sawmills cutting back on production and subsequently labour.
• Increased prices charged by Scandinavian mills to counter the previous year’s poor trading.
• Issues with the availability of EU logs due to recent increased felling volumes to combat bark beetle outbreak.
• Lower volumes of Canadian timber as the result of forest fires last year and this, which has had a knock-on effect on supplies from the US.?

TIMCON Secretary General Stuart Hex said: "TIMCON's members have reported significant hikes in the price of pallet wood over recent months. The recently published pallet timber index for Q2 shows a further increase of 4.4 per cent for homegrown wood, following on from the 0.3 per cent reported in Q1 – this is the first time we have seen two successive quarters of increase since Q2 2021 and Q3 2021. We have also seen an 6.5 per cent increase in imported timber from the Baltics, the first reported increase since Q3 2021. ?

"Since December the UK index has reported a total increase of 4.2 per cent. While this is significantly lower than the 20.1 per cent reported in the German HPE index over the same period, the UK monthly index is clearly showing that prices are continuing to rise in the UK."

Hex added that, with the UK second only to China as a wood fibre importer, “TIMCON applauds the work that?CONFOR is doing to push for increased tree planting.”

"With some predictions suggesting the country won't see a recovery in the house building sector until 2025, we hope the newly elected government will introduce measures to stimulate an uplift sooner rather than later," said Hex.