A shortage of timber has arisen as we have significant global industrial capacity. How could this crisis have taken place? What are the consequences ? We decipher all these reasons for you.
The shortage of wood started at the beginning of October 2020. The health crisis played a big role in this shortage. Many companies have stopped their activity for several months and the strong and rapid recovery in activity has caused logistical disruption by contributing to the disruption of supply chains.
She started in the United States. It is explained by the policy put in place by Trump to tax Canadian timber. The ultimate goal: to stop marketing this wood, which was the country’s main supplier.
In the same period of time, the former president has also set up assistance for individuals wishing to renovate their homes. The demand for wood has therefore increased sharply as sawmills closed with the subprime crisis.
These reasons have prompted companies to turn to Europe and in particular Germany and Austria (main suppliers of France with Scandinavia). The latter took advantage of the arrival of the United States on the market to increase their prices. Wood then became more scarce. You should know that 80% of wood in France comes from imports.
The second reason for this shortage of wood in France is the supply of our sawmills. If we take the example of oak, 1 in 3 oak harvested goes directly to China, since this country has stopped harvesting timber for 99 years. It therefore sources from all over the world and mainly from Russia. Today, he is buying less and less timber there in anticipation following the Russian announcement to stop timber exports on January 1, 2022.
As a result, China buys its timber in France through attacks from traders who speculate on timber. This is why France is asking for a safeguard clause at European level in order to give countries permission to regulate timber exports. All this provokes a logical reaction from our craftsmen who are afraid of running out of raw materials and who order twice their need.
The third reason for this shortage of wood in France is its transformation. France is sorely lacking the industrial tools to transform it. In 2020, one in ten houses was made with imported wood, while 30% of the territory is covered with forest. This industrialization problem forces French companies to source from abroad. It is therefore necessary to develop high tech companies (approximately fifteen) in France to no longer depend on European imports.
Finally, this situation is also explained by the increase in the price of sea freight (+ 400% for containers) and the growing scarcity of containers.
Regulation of the market could probably take place at the end of 2021.
Obviously, the people to suffer in the first place from this crisis are the craftsmen who cannot complete the sites on time. This causes either a loss of turnover or penalties for late payment.
Some also no longer dare to take on construction work. They are unable to come up with a quote as the price of raw materials keeps increasing. As for quotes already signed, professionals will have to absorb the increase in raw materials to remain faithful to the estimate.
Building material stores are also affected by the unavailability of materials, delivery delays and consequent price increases. This will ultimately have repercussions on the end consumer who will experience higher prices in DIY stores since wood is not the only one affected by this crisis. Steel and plastic suffer the same fate. This price increase will probably cause a sharp drop in consumption and therefore in retailers’ turnover.