Prices for raw material hardwood thinnings have been fairly stable over the last few years but there is now a significant upward movement. So, what are the factors affecting this increase in firewood prices and is it just a spike or a trend?
We asked some of our suppliers for their take on the situation and their response is interesting because there are a number of factors in play and probably the most dominant factor is the increased demand for biomass.
I asked Andrew Bronwin from Andrew Bronwin & Co whose business manages woodland across Wales and the borders.
“Firstly, the start of 2018 has seen a sharp price rise in all round timber products, mainly softwood, but, following the poor winter weather, many of the larger mills have used their stocks and biomass suppliers are short of wood to chip. There is also a healthy increase in demand for timber products” he said.
Forestry commission statistics showed a surge in the price of standing timber (trees not yet harvested) up by 28% from March 2017 to March 2018. The price of softwood saw logs went up by 20.8% in the 6 months to March 2018 according to Confor, the organisation that promotes sustainable forestry and wood using businesses.
With the growth in the government’s Renewable Heat Incentive (RHI) whereby payment incentives are made to those who produce heat for electricity using woodchip, there have been some sizeable projects developed. Most recently, the Kent Renewable Energy Partnership have launched a new combined heat and power plant in Sandwich that requires approx. 200,000 tonnes per annum of woodchip, which they plan to source from hardwood thinnings – exactly the same product that is sourced for firewood! This, and other large projects, are increasing demand for low grade timber, both softwood and hardwood.
There are, of course, only a certain number of forestry contractors in the country that can mechanically harvest woodland and, as it happens, they would all prefer to harvest softwood (spruce, larch, fir etc) that is tall and straight and soft too. This makes it much quicker to harvest and puts less stress on the harvesters, making it more profitable for the contractor. Additionally, there are also a limited number of timber lorries to move the timber and it seems that rather a lot of lorries are committed to taking timber down to the Kent biomass plant.
Firewood itself, which is predominantly hardwood (oak, ash and beech would dominate), saw a significant increase in demand last year due to the long hard winter and this has left most suppliers with very little stocks, unlike the previous spring when stock levels were high. This has led to an unusually high demand for firewood grade hardwood.
So, with all the above factors in play at the same time, it is inevitable that raw material timber prices will rise. Whether it is a short-term blip or a trend is difficult to say, but historically timber prices generally follow a cycle.