European plywood sector struggles less than expected

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Expectations of the impact of the pandemic on the European plywood sector turned out to be worse than the reality. EU and UK plywood importers and distributors took a range of steps to comply with social distancing and other health guidelines throughout the lockdown, it’s reported that most of the sector did keep trading. Nevertheless, overall trading levels in the first half of 2020 are reported sharply down. The fall in turnover in the first six months of 2020 varied according to importers’ product mix and national markets, with estimates ranging from 15% to 35%. However, some had expected a bigger contraction. A multi-national importer/distributor reported to ITTO the French market through April into May down 75%, the UK 65% and Belgium 35%, but business in the Netherlands and Germany was significantly less affected. One company said its sales in these two countries had enabled it to maintain first half construction sector business overall at 90-95% of 2019 levels.

UK importers reported a strong DIY trade. Construction activity varied from site to site, some closing, others continuing, operating to health guidelines. Most interruption was reported in Scotland where the sector was hit by the strictest lockdown rules. In common with most continental counterparts, a UK company said their worst affected areas were packaging, shop fitting, the exhibition sector and hospitality refurbishment.
On supply side, some interruption was reported out of Indonesia and Malaysia due to the lockdown; some factories reported to have closed for several weeks, others reduced output. But the major issues took place in China as a result of Chinese New Year and the pandemic. The impact was partially softened by lower demand in Europe, but companies still report they are coming close to selling out. Despite the supply issues, bar moderate weakening in Chinese product more recently, importers report S.E. Asian prices have been stable over the last few months, with just “minor adjustments”. The supply of Brazilian elliottis and Russian birch plywood, however, has been on a downward trend, the former falling 20 to 25% over the first half of 2020, the latter 10%.

According to analysis of latest UK Government and Eurostat statistics, total plywood imports by the EU27+UK (excluding internal trade) dropped by 16% to 1.58 million m3 from January through April this year compared to the same four months last year. EU27+UK tropical hardwood plywood imports, including both direct from the tropics and from non-tropical countries, were 137,000 m3 between January and April this year, 38% less than the same period in 2019. EU27+UK tropical hardwood plywood imports from China from January through April were 59.5% lower at 43,000 m3. Imports of tropical hardwood plywood also declined sharply from Indonesia (down 34.6% at 38,000 m3), Gabon (down 3.3% at 9,000 m3), Brazil (down 43.9% at 4,000 m3) and Vietnam (down 45.8% at 4,000 m3). However imports from Malaysia were up 47.1% at 27,000 m3.

In contrast to tropical hardwood plywood, EU27+UK imports of temperate hardwood plywood were up 3.1% at 815,000 m3 in the first four months of 2020. Imports of this commodity from Russia were 4.8% ahead at 410,000 m3, from Belarus up 22.7% at 67,000 m3, and Uruguay up 31.9% at 7,000 m3. However, imports of temperate hardwood plywood from China were down 1.7% at 278,000 m3 and from Ukraine down 5.6% at 44,000 m3.

EU27+UK imports of softwood plywood declined 27.1% to 623,000 m3 in the first four months of 2020. Imports from Brazil were 30.3% lower at 456,000 m3, from Chile down 20.9% at 54,000 m3, Russia down 7.5% at 53,000 m3 and China down 52.7% at 25,000 m3, while those from Canada rose 77.5% to 8,000 m3.

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