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

Whether it’s because I continue to advocate my belief in a faster market change than the wood industry statisticians steadfastly maintain, but the first PMI-figures confirmations are already showing some…

Since July 2022, the European manufacturing PMI has been positioned in the contraction zone below 50. Even though this is not yet the longest sustained period in this contraction zone or the most extreme. It does have the fastest drop in demand since the collection of this data (1997). Therefore, companies are still lowering their purchasing inventories.

Globally, our wood (and paper) sector is firmly at the bottom in terms of PMI manufacturing performance output. India experienced the strongest growth worldwide, and the US closed the limited row of ‘growth > 50’.
With France, Italy, Spain, and Germany at the forefront as the worst performers, it seems the European manufacturing sector is dragging itself downward. Yet, it seems the bottom has been reached. The plunge downwards appears to have landed. When demand will overwhelm supply still seems to be some way off. At the earliest in the first half of 2024.

It would be something, the whole market is still reducing its inventories and ordering very short-term, and then suddenly, your essential head size is no longer available… Then you just hope that this is not due to shortages of roundwood, logistical problems, or constructive production reduction measures, which are increasingly being implemented, because they are not easily scalable.
Where the free fall in purchase prices has not yet been caught up by the selling prices, the inventory reduction taken place at the buyer side seems too optimistic to me. Despite the fact that the demand side is not picking up or even decreasing here and there, the moment of turnaround is closer than it has ever been. You won’t be buying cheaper wood then you did till now in the coming months…

So strengthen your inventories; who knows, the ‘wood winter’ may be harsher than you think!

https://www.linkedin.com/posts/driessenrob_softwood-timber-pallets-activity-7127656772084842496-MdBx?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAmPJtABFEvzNsnxg0aKqOaxqF0Dc9DGFSw