Mid-month price levels hold in West Africa

Continuing price trends from mid-January, West African exporters have held all log prices unchanged through the end of January. Demand has not changed and buyers for China are maintaining their policy of purchasing a more limited number of species. Indian demand remains firm for belli, but at slightly lower prices than negotiated at the end of 2007. There are signs of a revived interest in okan and it is possible prices may recover from the recent lower levels resulting from falling demand in the past year. Sipo and sapele have held firmly to recent price gains for both logs and lumber. Exporters are less nervous about more competitive prices for Far East species. The early February celebrations for the Chinese New Year will cause the normal slow down in logging and sawmilling. Consequently, there is unlikely to be any surge in production until mid-February.

Although all traders are watching the global market carefully, the full impact of the market seems not to have a sharp bearing on the industry. The fall of U.S. housing prices and house demand, together with a reported surplus of unsold new-build housing in Spain, are affecting timber markets. However, it does appear that the major impact of the U.S. market is likely to be on South American and Asian suppliers rather than on the lesser volume of trade with West Africa. Freight rates are high and have not changed after the moderate hikes in December 2007, although this has not yet inhibited trade volumes. One exporter recently noted some difficulty in obtaining shipping space for Europe, although this seemed not to be a significant problem.

As with logs, prices for sawn timber are unchanged from mid-month levels. Although markets are still said to be quiet, demand has remained moderate, possibly helped by the mild winter conditions so far in Europe, where rain is more of a problem for the construction sector than the normal snow and ice. However, continental European and UK buyers are being very cautious over concerns about the full effects of the U.S. credit crunch. Sapele and sipo are in demand and moabi also continues to be popular. Okoume, douka/makore and movingui remained in good demand and are unchanged at recent higher prices. While there are no forecasts for the medium term, experts say prices should remain stable at least until the end of February.

*West Africa logs, FOB*	*€ per m3*
Asian market	LM	B	BC/C
Acajou/ Khaya/N'Gollon	221	190	175
Ayous/Obéché/Wawa	221	205	168
Azobe & Ekki	152	152	91
Belli	198	198	-
Bibolo/Dibétou	168	167	114
Bubinga	533	457	381
Iroko	289	274	259
Okoume (60% CI, 40% CE, 20% CS)	-	150	-
Moabi	335	335	282
Movingui	205	190	152
Niove	129	129	-
Okan	198	198	152
Padouk	289	289	267
Sapele	297	297	282
Sipo/Utile	335	305	267
Tali	190	190	152
Gabon Okoumé logs, FAS*	€ per m3
Grade	Asia	Europe
QS	213	219
CI	171	171
CE	146	150
CS	108	111

*Based on SNBG official prices

West Africa sawnwood, FOB		€ per m3
Ayous	FAS GMS	396
Ayous	Fixed sizes	427
Okoumé	FAS GMS	375↑
	Sel. & Bet. GMS Italy	310
	Sel. & Bet. fixed sizes	-
Sipo	FAS GMS	630↓
	FAS fixed sizes	-
	FAS scantlings	645↓
Padouk	FAS GMS	600
	FAS scantlings	630
	Strips	425
Sapele	FAS Spanish sizes	620↑
Sapele	FAS scantlings	635
Iroko	FAS GMS	458
	Scantlings	519
	Strips	304
Khaya	FAS GMS	396
Khaya	FAS fixed	427
Maobi	FAS GMS	630
Maobi	Scantlings	645
Movingui	FAS GMS	460

Mid-month price levels hold in West Africa

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