Thursday, May 27, 2021

Poland: "Wood prices in space"


 Polish monthly magazine "Gazeta Bankowa" (Banking Journal) writes: "The insanely expensive lumber creates vast confusion in this raw material and related industries. Polish producers of windows, doors, and furniture may suffer."

“The price of sawn timber, that is, a trimmed tree has gone mad. How else to call the increase in the raw material price in the last 12 months by nearly 270%, and since the beginning of this year by almost 70% (talking about the cost of wood contracts, denominated in dollars)? This has significant consequences for the entire wood industry - both for producers and distributors of this raw material. And also for furniture manufacturers and companies from the construction industry. And as you know, furniture production is one of the essential branches of the Polish economy.“

What happened? In Western markets, especially in the US and China, there has been a double shock: demand and supply. Sawmills misjudged the demand for sawn timber - they expected it to decline because of a pandemic recession, so they reduced production in spring 2020. Meanwhile, however, there was a sharp increase in demand for this raw material due to a radical improvement in sentiment regarding renovation and construction of houses. In the second half of 2020, distributors withheld orders and purchases of raw material, as they hoped that the price of sawn timber would drop in the first months of 2021. Meanwhile, that did not happen - so there was a “shopping fever” pushing up the price of lumber. A similar thing happened in Poland, and now there is a small crisis.

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