MANAGEMENT SUMMARY The coronavirus crisis has severely unbalanced the supply and demand of raw materials The coronavirus crisis has severely unbalanced the supply and demand of raw materials for the production of durable goods. While manufacturers had to scale down production and inventories due to the pandemic, demand for furniture and other furnishings as well as construction and renovation materials for interiors and exteriors increased. In addition, unfavorable natural events such as extreme drought or damage caused by bark beetles have led to bottlenecks, especially in the recent past. Supply chains that had been interrupted or disrupted by lockdowns had to be successively reactivated. Further incidents like the Suez Canal traffic jam and the blockade of one of the world’s largest container ports in China worsened the situation. As a result, commodity prices have almost exploded. On average, there have been price increases of 30 percent since the fall of 2020 and 20 percent since the beginning of the year – with peaks of 65 percent for secondary metal raw materials, for example. The strongest increase was recorded for wood, where the price in Germany doubled since September. Lumber price could reach record high in December For wood, the manufacturers interviewed expect an increase of up to 33 percent by the end of the year. In the UK, where Brexit is making wood procurement particularly difficult, respondents even indicate possible increases of up to 180 percent for certain types of wood. The strongest driver is cited as the continuing high demand for wood products. With the easing, the economic crisis seems to have been finally overcome, and the population’s willingness to invest is on the rise again. The main demand is for indoor and garden furniture, as well as terraces, balconies, fences, carports and even complete wooden prefabricated houses. 42 percent of participants also point to a decline in supply. Some geographic areas, such as Sweden, Germany, Ireland, the United States and Canada, have had to temporarily reduce or interrupt their normal production activities. In addition, border closures to limit Covid-19 infections have restricted commercial shipments, delaying deliveries. With the delta variant rising exponentially, respondents now also fear further lockdowns in Europe and thus the continuation of strong demand, resulting in a new record high in the price of wood by December 2021. 3
Download PDF file