In recent months we have witnessed an unprecedented escalation in the price of timber. This has also happened with other raw materials, but the case of wood is particularly striking because it has seen rises of up to 400% and because it is an incredibly important material for construction and logistics in countries.
Currently, the timber futures market is around €1300 for 1,000 ft (304.8 m) of board but, in April it broke through the €1500 barrier. In April last year it was barely over €300.
Here we summarize the 6 causes and 3 consequences of this spectacular rise in the cost of wood.
6 reasons why the price of wood has increased
- We are coming from low production levels
Prior to the pandemic, the timber market was experiencing weak demand and low prices due to excess inventory and severe weather conditions that led to mill closures and a significant reduction in production.
- Increased demand in the construction market, particularly in the US
In the aftermath of the pandemic, many people, especially Americans, who use wood extensively in construction, want to upgrade or change their homes. This leads to an increase in the demand for new housing and the building materials used (wood panels, wood slats, stc) also in renovations and extensions.
- Major commitment to the ecological and sustainable
The trend towards the ecological and sustainable has been imposed in the construction sector during the year 2020 and wood has been enthroned as the ideal material because it is both highly renewable (PEFC and FSC seals) and easily recyclable.
– TO BE CONTINUED NEXT WEEK –
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