UK imports of tropical hardwood plywood from China recover slowly

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The UK imported 66,800 cu.m of tropical hardwood faced plywood from China in the first eight months of this year, 55% less than the same period last year. UK imports of plywood from China ground to halt earlier this year when China went into lockdown.

There were hardly any deliveries from February through to early April and UK importers were forced to live off inventories.

UK importers report that through April and May this year Chinese plywood supply recovered steadily. By July, supply was back to normal and significant volumes under delayed contracts began to arrive.

It is expected that some of the lost volume from China will be made up later this year. On the other hand, rising freight rates, up in the last couple of months from US$1,300/1,400 FEU toUS $2,000, strengthening of the CNY against the dollar, and higher raw material costs are now impacting China’s competitiveness in the plywood market.

Likely due to supply problems in China, UK imports of plywood from Malaysia, which have been in long term decline, have recovered ground in 2020. Despite significant slowing in May, imports from Malaysia were still up 20% at 42,600 cu.m for the first eight months of the year.

In contrast to Malaysian plywood, UK imports of Indonesian plywood fell 40% to 23,900 cu.m in the first eight months of the year. In addition to supply problems during the pandemic, Indonesian plywood has come under very intense competitive pressure from Russian birch plywood this year. Russian plywood is reported to have become more competitive overall, with the rouble sliding from 77 to the euro in June to over 90 in September.

Indonesian plywood has lost share particularly in the large market for 18-21mm film-faced for construction where Russian birch now dominates. Although Indonesian supply is now reported to be back to normal, albeit with freight rates increasing costs, UK imports of Indonesian plywood are now focused more on more niche products such as thinner plywood and for overlay and 2.7mm items for the caravan industry.

In recent years, the UK has been importing small volumes of tropical hardwood faced plywood from Latvia and Spain. In the first eight months of 2020, imports increased 4% to 6,800 cu.m from Latvia but fell 43% to 3,900 cu.m from Spain.

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