Wood Price

How do we get the wood price?

Just like other raw materials, supply and demand is a very important condition for the price of hard wood. And more need for buildings worldwide helps as wood is one of the most important raw materials used in building these.

We also want to build wooden garden houses or garden sets in our houses, because of the increase in wealth and appreciation of the outdoors.

Because of corona the demand for wood rose as well. More people worked at home and wanted to do more construction at home. People needed a new work space to work at home and the supply could not keep up with the demand.

Logistical problems also were another reason for a higher price. The huge container vessel that got stuck at the Suez canal was one of the examples for this.

This example caused a lot of delays for the whole shipping trade, which calculated itself through to higher wood prices.

Count the many saw mills that stopped their work because of Covid and there is a cluster of reasons why the supply of wood became so small. Many people started hoarding wood.

Companies like contractors and producers of interior products got into huge issues.

It was difficult and almost impossible to get wood. The costs of shipping were averagely about 3 times as high as normal and it was only so far that they could put that onto the shoulders of the consumer’s prices.

Do you know the slogan? Wood is the new good. That says something about the record breaking prices that it got to.

Production countries for wood

6% of all wood comes from the Netherlands, but the rest comes from other productino countries of which 70% is a part of the European Union. Mostly Germany, Sweden and Finland produce a lot of wood. But a lot of the wood is also imported in different forms, think about paper, cardboard, sawed off wood and plating materials. These are mostly produced by tropical countries.

Russia is currently number one in amount of forests. About 22% of all of Russia is forest. In second place is for Brazil with 17% and third you find Canada with 7% of all production capacity. Fourth is the United States with 6% and the top 5 gets closed with 4% for China.

Facts about the raw material wood

Fact 1: Wood is often divided into two groups: Hard wood and soft wood.

Fact 2: The artist Piet Hein Eek used scrap wood to create furniture. He was the first to do this. His graduating piece in 1989 was a huge success when he created a closet from scrap wood.

Fact 3: Cutting down tropical hard wood has done a lot of damage to tropical rainforest.

Fact 4: Wood can be damaged by fungi. It is special to see that wood gets a black mark on it. We call this “sleep”  in wood. If this fungal process lasts too long, the wood can rot. If you notice it early enough, this sleep can simply give decorative coloring to the wood.

Fact 5: Leaf trees grow slower than pine trees. A leaf tree has a higher density and is much harder. Leaf trees produce what we call hard wood and pine trees soft wood.

Fact 6: Paper is made out of wood. And did you know you can never fold paper more than 7 times over?

Fact 7: Dendrology is the study that researches trees and bushes.

Fact 8: An FSC approval or PEFC approval means that the wood has been cut responsibly. This is how the EU wants to end illegal forestry and the trade of it.

Fact 9: Wood is the oldest fuel in the world. And it is the most nice to the environment.

Fact 10: Disposable wood can be divided into three categories:

• A Wood: This is clean wood. The wood has not been treated and does not contain toxins. A wood is used often in crates, coffins or pallets.
• B Wood: This has been glued, painted or varnished. Examples of B wood are triplex and multiplex.
• C Wood: Also known as impregnated wood. This wood has addittives which lengthen the lifespan of this wood.

Fact 11: Did you know the joke: There goes another forest? If someone gives you a pile of paperword for example? Trees are almost exclusively used to create paper! In Europe a lot of recycled paper is used and paper fibres to create paper.

Fact 12: Paper can be recycled. This can happen up to 7 times! The 7th time the paper fibers are so small that it cannot be used properly anymore and they create egg boxes from them.

Fact 13: Did you know that charcoal is charred wood? And that this gets used to barbecue but also can be used in beauty products.

History of wood

In ancient times people foudn out that wood is a strong material pretty quickly. It is useful for burning to keep the fire going, but also to create tools like in the times of hunters and gatherers.

In those times a lot was made out of clay, but wood was also a popular raw material to create things out of. As the technology advanced, the use of wood increased too. They could create it at a larger sclae.

This is when saw mills arose where trees could not only be cut, but also stripped. With this technology also came the art of printing books. A lot of paper was needed for this.

A nice example of how wood was used are the ships in the Golden Ages where shipping trade was booming. The building of ships florished, which made ships and warehouses bigger and bigger.

Still a lot of the houses in the United States are made of exclusively wood.

There is a period now where we are looking at the effects of cutting down the trees as well. For each cut down tree, a new tree gets planted. This is how we want to influence the climate positively.

What exchange trades wood?

Wood is traded at the world exchange. The Chicago Mercantile Exchange has recently upped its daily limits. This is to account for the rally that has started in search for the demand of wood.

Wood and the future

The demand for wood will remain. There is a large demand for wood, for not only the housing market, the interior design, shipyards, furnitures and animal supplies but more. Because there will always be a large demand for wood, it is a stable raw material to invest in.

The most important moments of 2021

In 2021 we saw the wood price rise to a new level. This did not only have everything to do with the corona pendemic, but also the rising raw material prices. Wood is nowadays more protected and it is not possible to just get this anywhere in the world. This creates a scarcity in the market. We saw this mostly in the paper industry. There is also a so called rise in personal investments in and around the house. During the pandemic a lot of people were withotu a job or at home and a lot of them had more time to invest in their homes that might have already been on the waiting list for ages. The fact you could not travel to go on holiday either gave people more free time. However you look at it, this increased the budget that people had to invest into renovations that require wood.

These are the expectations of 2022

The expectation is that in 2022 the wood price will be rising hugely again. A lot of the wood that is imported coems from Russia. This country is now in a war and they will need more money. 2021 also created a large scarcity because of all the DIY projects at home. Scarcity always makes the price go up. We rae already now 35% more expensive for wood products than last year. Besides this wood is imported over long distances, and with the gas prices rising, the costs for transport is calculated back into the hard wood price on the stock exchange.