Wood recyclers forced to push up gate fees

Businesses in England, Scotland and Wales have reported that they have put their prices up by £1-£3 a tonne because board mills – which represent the largest market for recycled woodchip in the UK – are selling less board and therefore taking in much less material.

The issue, which has been exacerbated by the high cost of diesel, stems from falling demand from both the furniture and construction sectors following the credit crunch – with the building industry particularly hard-hit.

One recycler told letsrecycle.com: “The market is terrible at the moment and the board mills are taking in 30% less wood. Mills are slashing prices for woodchip as they are in a strong position. We need to charge higher gate fees and some wood recyclers are closing their gates, meaning there may be casualties.”

Another revealed: “Board mill prices have gone down and gate fee prices have gone up accordingly by £1-3 generally. The problem has been made worse by the high cost of diesel, which is pushing up overheads.”

Alistair Kerr, director general of the Wood Panel Industries Federation, explained that most board mills were shutting down for longer than normal over the summer to limit costs – which has made the situation for wood recyclers worse.

He said: “Board manufacturers, like all other industries, are trying to constrain their costs as much as possible to weather the storm.

“Most have taken either extended or forced shut-downs with a view to controlling stocks that way. That has a knock-on effect in terms of raw material demand, but I couldn't tell you how much less recycled wood is being taken in until we do our annual survey next year,” he added.

John Rainger, wood buyer at Norbord in Devin, confirmed that, because of the economic climate, his plant was currently taking in “several hundred tonnes a week less” than normal, and would stop this week for two weeks for maintenance – much longer than the two or three days that was typical in August.

He said: “We are using a higher percentage of recycled wood in our products but because we are close to the construction industry our sales have dropped off. Things started to go downhill around Easter as people started spending less money on home improvements.”

Richard Coulson, residues buyer at Kronospan in Chirk, North Wales, agreed that it was an industry-wide problem.

He said: “We are actively trying to take cleaner material so we would advise wood recyclers to make their woodchip as clean as possible.”

However, although the board mills said they could not foresee when things might pick up, Mr Rainger said that the pound falling against the Euro had somewhat helped the situation by driving up continental demand for board, commenting: “It is not all doom and gloom.”

Mr Kerr added that there was pent-up demand for housing in the UK, meaning that the future was brighter.

He said: “Times are difficult but demand for housing is definitely there. The long-term prospects are good – it's just a case of when. We are waiting to hear from the Government on what measures they are putting in place to stimulate the market.”