Central/West Africa: Minor price changes but focus is on change in China

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ITTO/Fordaq
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A few minor price movements were reported in the first week of July but most log and sawnwood prices remain unchanged because of only moderate demand in the main markets.

Of major concern to West African exporters was the rapid collapse of stock values in China and the impact this could have on domestic consumption. A large volume of equities in China are in the hands of small investors many of whom have borrowed heavily to buy stocks.

Coming on top of the recent weakening in property prices in China it is expected that this latest shock will undermine Chinese consumer confidence and that spending will decline.

Analysts say it is too early to forecast if, how and when this situation will impact timber imports but it is likely there will be a period of adjustment until growth trends in the Chinese economy stabilise.

There is has been no change in the level of production and West and Central African producers continue to rein-in production through temporary mills closures and limiting output to orders in-hand. The consensus is that demand will not improve significantly in the short term.

Middle East luxury apartment segment driving demand for high value veneers

Demand from Middle East buyers is holding up but price negotiations are getting tougher as buyers take advantage of market weakness in the EU and now China.

Buyers for Middle East markets continue to look for low cost species and at the same time are raising demands on specifications and quality. Much of the recent purchases, especially of high value veneers, appear destined for the luxury apartment segment of the housing market.

Construction companies in the Middle East report high order book volumes for luxury, new-build accommodation.

No price differential for certified or verified legal products

Producers say business in Europe is slow. There has been some recent interest in azobe, bilinga, moabi and sapele and prices are firm with EU buyers being prepared to pay for their usual high quality.

These orders come with demands for fully verified legal and even certified timber. Producers say they sense there is now little or no price difference between these two alternative methods of satisfying the issue of legality.

Pressure to find new markets

Some West African producers continue to try and diversify into Asian markets other than China and a small number are considering venturing into further processing of mouldings and high quality interior trim.

Log Export Prices

West Africa logs, FOB € per m³
Asian market
LM
B
BC/C
Acajou/ Khaya/N'Gollon
230
230
160
Ayous/Obéché/Wawa
260
260
180
Azobe & Ekki
230
230
160
Belli
300
280
-
Bibolo/Dibétou
150
145
 
Iroko 330
290
260
Okoume (60% CI, 40% CE, 20% CS) (China only) 240
240
160
Moabi 335 305 225
Movingui 210
210
160
Niove
160
160
-
Okan
250
250
-
Padouk
310
285
225
Sapele 320
320
240
Sipo/Utile
345
340
265
Tali 320 320
-

                                                                                                                                               

Sawnwood Export Prices

West Africa sawnwood, FOB
€ per m³
Ayous FAS GMS 400
Bilinga FAS GMS 500
Okoumé FAS GMS
360
Merchantable 225
Std/Btr GMS 280
Sipo FAS GMS
610
FAS fixed sizes 610
FAS scantlings 640
Padouk FAS GMS 920▲
FAS scantlings 980
Strips 500
Sapele FAS Spanish sizes 600
FAS scantlings 610
Iroko FAS GMS 610
Scantlings 690
Strips
440
Khaya FAS GMS
450
FAS fixed
460
Maobi FAS GMS
610
Scantlings
630
Movingui FAS GMS
420
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