July 05, 2022. – Plywood buyers and sellers have been busy this year, once again. The global plywood market is inter-connected, and the supply/demand changes somewhere impact all continents. We look at things from a company perspective, but we are all part of a bigger network. When entering a holiday season, it is nice to sit back and think about what happened a few summers ago.
Back in the summer of 2020, the first waves of the pandemic had left the plywood market in a state of confusion. It was extremely difficult to see what was going to happen in the market. After summer the demand started to rise month after another, but the prices didn’t yet follow.
In spring 2021 the demand started to rise again and the supply couldn’t follow. In summer all softwood panels and timber broke new price records before the market cooled down in Q3. In June 2021 EU’s preliminary anti-dumping duties against Russian birch plywood came into force, and six months later they became permanent.
Now, in the summer of 2022, the hardwood plywood market has a solid demand derived from the Russian supply eclipse. Softwood plywood and OSB are supported by the building season and current projects, but there is a monthly fluctuation in volume and prices may indicate a market turn.
How about summer 2023? What will happen within the next 12 months? The current building projects will surely be finalized, but on what level the new housing starts will be? At the moment the costs and inflation look like a rising tornado, and I guess nobody is expecting to buy cheaper energy or fuel anytime soon.
How waterproof will the sanctions against Russia be? To what extent are we going to see veneers and plywood bypassing via friendly countries to the western markets? Are machinery and spare parts going to travel from the west via friendly countries to Russia?
If the global economy slows down, fewer goods are going to be transported. Could the container rates get cheaper, or will the global container balance get even more twisted? Or has the economy clock speed changed for good, and we will see another business boom after a short downturn?
In any case, we have interesting issues and opportunities ahead of us. I wish everyone a chance to recharge and get prepared for the new market turns. The world keeps moving fast and brain plasticity is needed to keep our thinking relaxed. Now, it is time to chill out for a while.