Overall actual softwood timber market reflection (inspired by PMI outcome February)

Whereas the Eurozone (46.5) is still somewhat lagging (although business activities are decreasing at the slowest pace in 8 months), it turned out that conditions in the global manufacturing sector improved for the first time in eighteen months (50.3)!
Unfortunately, regarding monetary policy, there seems to be no movement expected in March from the national banks despite worldwide inflation figures plummeting.

The manufacturing sector is reviving! This is primarily due to increased global consumer demand and the fact that the inventory reduction has come to an end, and ’the industry’ is starting to replenish it bit by bit.
In Europe, Germany shows the largest contraction in 4 months, and Spain has returned to growth. A shortage of labor is a ubiquitous reality throughout the Eurozone.
The question now is; will this positive disinflationary trend deter policymakers from lowering interest rates? That could temper this slightly positive production outlook future wise.

Then we come to our timber market.
When we link this to the positive PMI manufacturing industry developments with their correspondingly low inventories, we can indeed start to worry.
For those in the day-to-day operational timber buying field, it needs little explanation to see that the supply-driven situation we are in is dangerously taking a sharp turn. Will we stay on this road, or will we end up in the ditch or even worse, the ravine… The latter only happens if ‘sawmills’ want to straighten everything out at once with their pricing policy. This market is not yet ready for ‘Covid market-like price increases.’ The demand simply lacks.
On the other side, it must be said that when there is nothing to offer, it must be distributed among the demanders. That’s how the supply and demand forces work…
Throughout the timber market, there is creaking and groaning on the supply side, and this will gradually become almost deafeningly loud on the user side. Especially if sideboards are chipped for the paper industry or strikes further limit the scarce timber supply.
One thing is certain; it will be an exciting second quarter. Make sure you switch gears in time. Before you know it, you might miss the boat….”

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