However, many operators have told letsrecycle.com that they have cut their prices by as much as £5 a tonne in a bid to attract more material into their yards because volumes have been severely affected by the recession – particularly from the lack of material coming in from the construction sector.
While the price cuts vary across the country, and not all operators are affected, competition is believed to be tightest in areas where wood recyclers are contracted to supply set tonnages to chipboard factories and are looking to fulfil these obligations.
Geoff Hadfield, chairman of the Wood Recycling Association, which is the trade associaiton for the sector, explained that it was material from industry – rather than civic amenity sites – that was the most affected.
He said: “There is only so much material. In some sectors such as house-building and construction the amount of wood waste has dropped dramatically – by as much as 50%.”
“People are chasing volumes and the only way they are achieving that is by undercutting prices”, he added.
Board mills
Alastair Kerr, director general of the Wood Panel Industries Federation, confirmed that the lack of material was being felt by the board mills as well, with many currently unable to stock as much material as they wanted.
He said: “The lack of material around has reduced the amount we can use. It is not as bad as it could have been as board manufacturers have also reduced their output, but it is affecting their stock level.
“Factories like to run with two to three weeks worth of stock and there is less material available at the moment. Local shortages also means that virgin material has to be used instead from time to time”, he added.
Climate
Looking at the wider picture, Mr Hadfield predicted “harder times before it gets better” and said that, as with other sectors, there could be casualties. Some recyclers have already cut down to a four-day week and it is not thought that the Landfill Tax escalator, which will see landfill tax rise by £8 a tonne in April and has always helped to drive wood recycling, will have as much as impact this year as in the past due to the economic climate.
The recession is also believed to be affecting plans for wood-burning biomass plants, which have been stalled due to difficulties in securing finance.
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