Central/West Africa: Investment plans on hold until EU demand recovers

Fonte:
ITTO's Tropical Timber Market Report
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Some sawmillers say they are struggling to source sufficient logs to maintain production of existing orders. However, because markets in all EU member states remain quiet, some of the pressure on producers arising from an inadequate supplies of logs has been eased.

Across the region there are few reports of new orders for sawnwood as European buyers are currently well stocked with West African hardwoods and are not inclined to confirm new business.

In the short-term, weak construction activity in Europe will dampen demand. There are few signs of an immediate expansion of building activity in the EU so it seems likely that demand will remain subdued well into the third quarter.

Companies in the region are reluctant to begin expansion plans while demand in the main markets, especially the EU, is weak. Adding to the concerns of companies in the region is the slow progress in implementation of government funded infrastructure projects in some countries. Analysts report that in some countries in the region poor physical infrastructure is a serious handicap to efficient trade.

Sapele prices continue volatile swings

Sawnwood prices are currently stable but, should the log supply worsen, this could change. If log prices increase because of availability issues then this will inevitably lead to opportunities for some modest increases in export prices for sawnwood even though demand is slack.

At the moment sapele sawnwood price movements are in the news again but because prices are under a downward pressure. This is because, while demand is steady, there are fears in the market that over-production could trigger a fall in prices. Trade sources suggest that some sapele producers will slow production to try and stabilize the market.

Demand for padouk sawnwood is reported as weak because importers in the main markets India and Belgium are well stocked at present.

Industry adjusting to changes in species availability

Forestry authorities in the region are now strictly monitoring concession holders and any infringement of regulations or failure to follow agreed management plans by concession holders is penalised immediately.

Recognising the changes that are taking place in terms of availability of raw materials some West and Central African producers are reviewing their business plans and restructuring or closing some mills and concentrating production on species more common in their concessions.

Log Export Prices

West Africa logs, FOB € per m³
Asian market
LM
B
BC/C
Acajou/ Khaya/N'Gollon
215
215
-
Ayous/Obéché/Wawa
220
210
150
Azobe & Ekki
215
215
140
Belli
220
220
-
Bibolo/Dibétou
145
130
 
Iroko
265
220
215
Okoume (60% CI, 40% CE, 20% CS) (China only)
245
225
200
Moabi
285
280
-
Movingui
185
155
150
Niove
165
165
-
Okan
285
300
-
Padouk
340
320
235
Sapele
270
255
175
Sipo/Utile
320
290
175
Tali
280
280
-

                                                                                                                                   Sawnwood Export Prices

West Africa sawnwood, FOB
€ per m³
Ayous FAS GMS
330
Bilinga FAS GMS 515
Okoumé FAS GMS
480
FAS. fixed sizes
290
Std/Btr GMS
340
Sipo FAS GMS
550
FAS fixed sizes -
FAS scantlings 520
Padouk FAS GMS
860
FAS scantlings -
Strips -
Sapele FAS Spanish sizes
480
FAS scantlings
505
Iroko FAS GMS
580
Scantlings
600
Strips
435
Khaya FAS GMS
430
FAS fixed
465
Maobi FAS GMS
550
Scantlings
550
Movingui FAS GMS
400

                                                                                                                                         Market prospects for third quarter difficult to assess

The outlook for the West and Central African producers is difficult to judge. On one hand, raw materials are becoming increasingly difficult to secure which should result in price increase but, on the other hand, market demand is still very subdued which is having the opposite effect on price movements. Market prospects for the third and final quarter of the year are difficult to assess

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