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On supply, some interruption was reported out of Indonesia and Malaysia due to the lockdown; some factories reported to have closed for several weeks, others reduced output. But the major issue was with the Chinese product. The combined effects of Chinese New Year and pandemic saw shipments dry up.

The impact was partially softened by lower demand in Europe, but companies still report they are coming close to selling out.

“We’d stocked up as usual ahead of New Year. But rather than the usual two to three weeks hiatus in supply, it was seven to eight, mid-January to the end of March,” said an importer.

“Basically, we cleared our stocks and most customers were sold out, particularly on film-faced and other construction and industrial product. Even now, whatever’s coming in from China is presold and immediately going out again.”

Through May, Chinese and other S.E Asian supply was reported to have recovered and combined with slight weakening of the yuan, the consequence, said an importer, is that there is now more “flexibility on price”. “It’s generally not substantial, although there are some suppliers hungrier for business than others and open to offers,” they said. Despite the supply issues, bar moderate weakening in Chinese product more recently, importers report S.E. Asian prices have been stable over the last few months, with just “minor adjustments”.

The supply of Brazilian elliottis and Russian birch plywood, however, has been on a downward trend, the former falling 20 to 25% over the first half of 2020, the latter 10%.

“Combined with the weakening of the Brazilian real, which, despite slight recent recovery early June was still 25% to 30% lower than at Christmas, this left European importers who bought January and February, when prices were actually increasing, with expensive stocks they’ve had to discount,” said one company.

“There are signs prices have bottomed out, but, with the pandemic worsening in Brazil and their domestic market contracting, you never know.”

Russian price cutting was described as an “over reaction to market conditions”. “[Russian] suppliers have had problems. First, they had a mild winter and log shortages, then came the pandemic and contraction of the building interiors market, which is significant for them,” said an importer.

“But Russian suppliers seemed to get into a race for the bottom. Whether they’ve reached it yet is unclear. These are big companies which may have room for more cuts. As with elliottis, it’s meant write offs and particularly bigger stock-holding importers losing a lot of money.”

Plywood imported by EU countries from China by… (in EUR )
Importing Country Jan.-Apr 2019 Jan.-Apr. 2020 Change in %
EUROPEAN Union
143,262,186 68,096,479 -52 %
United Kingdom
75,299,615 19,142,810 -75 %
France
12,998,511 10,708,809 -18 %
Belgium
15,754,561 9,611,295 -39 %
Germany
10,148,486 6,135,313 -40 %
Poland
5,619,370 5,836,700 4 %
Others
23,441,643 16,661,552 -29 %
OTHER European Countries
246,749 198,824 -19 %
Cyprus
172,888 172,589 0 %
Croatia
73,861 26,235 -64 %
TOTAL 143,508,935 68,295,303 -52 %

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