FEFPEB warns of mounting price challenges

The European Federation of Wooden Pallet and Packaging Manufacturers (FEFPEB) has highlighted reports of increasing upward price pressure in recent months, as mixed market dynamics and supply constraints impact the market.

Independent indices in several European countries, including France, Germany, and the UK, have shown significant increases in the past two quarters.

The German HPE index for pallet timber moved from 391.09 to 419.09 between January and April this year; while in France, the National Wood Federation (Fédération Nationale du Bois) said it expects global pressure on log prices to push the price of sawn timber upwards.

“The timber market, particularly from the perspective of wooden pallets and packaging, is experiencing a notable upward price trend – interestingly, this is happening without a rise in underlying demand,” said industry commentator Rob Driessen of pallet and packaging procurement specialist Connec3.

“There is a key pressure point with centre-cut timber, especially spruce, where structural shortages are pushing markets towards price acceptance and demand is significantly outstripping supply.” He added there have been recent signs of stability driven by uncertainties about underlying demand.

“General uncertainty in the global marketplace has added complexity to the situation,” he added, “Such as newly introduced or anticipated US tariffs, leading to product stockpiling in some sectors and shifting patterns of trade.”

Meanwhile, positive signs in markets such as China, which have shown resilience, and factory output growing in the EU for the first time in two years, are counterbalanced by notable challenges, with significant contractions in Japan and the US, and lower business confidence dampening demand overall.

“For now, much depends on the unfolding of potential trade tensions and their impact on cross-border demand flows,” concluded Driessen.

FEFPEB Secretary General Fons Ceelaert said: “Independent market data from across Europe and reports from within our membership suggest that we are entering a particularly challenging period for the wooden pallet and packaging sector. Ongoing cost inflation in the price of energy, transport, and other inputs, labour shortages, wage rises, and geopolitical instability are among the factors creating a background against which sawn timber prices have been pushed upwards, despite demand being generally flat.”

Ceelaert added that FEFPEB was working to help European businesses stay resilient in the unpredictable market.

“FEFPEB is continuing to keep our membership informed about developments in the market and encouraging their own members to work closely and collaboratively with their supply chains to mitigate the impact of this turbulent period.”

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