Looking at the TDUK Structural Timber Price Index, you might be forgiven for thinking that the timber sector is a rollercoaster. A closer look though, should tell you we have seen five of the most volatile years in recent history (certainly in my 40-year career). The most likely next direction the industry should count on – is a return to the norm.
While we have seen some market commentators recently pointing with hope to either level or softening timber prices as a positive indicator for the market, taken in the context of the ‘worst run since global financial crisis’ for construction – you should not count on this situation to persist. It is more likely a ‘blip’, than a trend.
With inflationary pressure in the industry continuing to grow with labour and compliance costs, we can see why some might have been hopeful to find relief against materials (and not just timber). However, if history is the tell – prices will not run contrary to inflation trends or against the longer term trends of the market.
Context: Our work to track timber prices
Our index uses the average customs values of a mixed basket of softwood imports to reflect the changing value of the most critical solid softwood products here in the UK. The index has been in place since 2018 during which time we have seen some of the most volatile price movements the UK softwood sector has ever seen certainly within my 40 year career.
Below we have used some highlights from the last five years to illustrate the critical shifts have seen in the TDUK index and what these may suggest for what we might expect to see in 2026 and beyond.
2021 – 2022: Post-pandemic volatility and geopolitical shifts
Immediately post-Covid, demand for structural softwood surged and saw the TDUK index reach an all-time high of 190 in August 2021. Potentially, prices could have remained at this level – but this was partially mitigated by significant volumes of beetle damaged logs having to be felled and brought to market in H2 2021. These record price levels also created significant incentive for forest owner to bring their logs to the market.
The market landscape shifted even further with the conflict in Ukraine. Before the invasion, it is believed Russia and Belarus provided around 10% of EU timber supply. Sanctions from 2022 have removed the opportunity for this volume of wood to enter the EU and UK markets. During H2 2022 construction demand in the UK and throughout Europe started to slow significantly, helping to mitigate the reduced wood supply from Russia but putting significant downwards pressure on prices. We saw the TDUK price index fall from a high of 179 in mid-2022 to 105 by year end.
2023 – 2024: Market correction and supply constraints
Construction demand in the UK and Europe remained at low levels throughout this period and as a result we saw the TDUK index bumping along, reaching a low of 98 in January 2024 but returning to a level of 107 by the year end.
This reflects the prediction TDUK made during the price highs of COVID that cost prices of softwood would return to more normal levels, but at a base level somewhat higher than we saw in the decade pre covid. Several factors contributed to this, including the surplus of beetle-damaged Spruce logs (whitewood) were largely cleared, bringing to an end this source of cheaper whitewood logs, and with the frenzy of post covid construction demand in the distant past and softwood selling prices at low levels throughout Europe forest owners in northern and central Europe saw little incentive to bring their logs to market. This reducing log supply saw log prices rise significantly throughout Europe.
These increasing log prices accelerated during the second half of 2024 and saw Spruce (whitewood) logs rising at a faster rate than the traditionally more expensive Pine (redwood). With high log prices and low selling prices, sawmills slowed output and began to take old and less efficient production capacity out of the system. Production removed from the sector to combat rising costs and lower selling prices includes extended breaks in production, temporary closures of production lines, and permanent closures of older production lines – with the full closure of some mills.
2025: The ‘demand bubble’ and economic headwinds
At the start of the year a lack of stock in the supply chain and some early signs of construction market demand supported upwards pressure on selling price. The opportunity for increased prices encouraged sawmills to bring softwood stock to the UK, but this now includes a higher proportion of Pine (redwood) in order to achieve required lengths and specifications UK buyers need.
This demand bubble in Q2 2025 saw the TDUK index rise from 107 to 130 by mid-2025. However, construction demand slowly fizzled out as the year progressed and the prospect of a late budget killed any opportunity for a recovery before year end. By Q3 2025, import figures show a 3% fall for softwood imports against 2024 – and the TDUK index already having fallen back to 125. These figures support the NSD forecast published in September which predicted a 3.2% decline in softwood imports for the full year to December 2025.
In the final quarter of 2025, construction demand remained subdued putting downward pressure on prices. As we have seen towards the end of previous years some softwood traders who wanted to clear or balance landed stocks were prepared to do deals in December generating cash before the close of year end.
2026: A precarious balance
As we open 2026, the picture is very similar – log prices across Scandinavia, the Baltics and Central Europe remain high, while a lack of construction demand in the UK and most other European countries is putting downwards pressure on prices. However with low stocks at sawmills and throughout the supply chain, current selling price levels are creating little or no opportunity for sawmills to increase production and bring stocks to the UK.
While forecasts indicate UK construction demand will start to increase during 2026, how soon and how fast are the unknown factors. As we saw in 2025 there will need to be a visible uptick in construction demand to encourage an increase in structural softwood imports. However, past experience indicates this will almost immediately trigger upwards pressure on cost prices to allow sawmills to access the necessary logs they need to increase volumes to the UK market.
Once we get into a period of increased construction demand, it will be a bumpy ride as supply struggles to keep pace with demand. As demand rises sawmills will have more opportunities to bring mothballed production capacity back on line, and in some cases trigger investment in new saw lines or kilns. But there will be gaps in specifications and potentially some product in short supply while these facilities are coming back up to speed.
This might be supplemented by new supply sources, with Eastern Canada showing interest in the EU and UK markets. This could facilitate a new source of supply during 2026 and beyond, with CLS and smaller carcassing dimensions likely to spearhead any increase in imports from Canada.
Future softwood supplies will include more redwood than previously seen in the UK structural softwood market with longer lengths such as those 5.4m and above increasingly being finger jointed. There will be price volatility and base prices are anticipated to sit at a higher level than was the norm pre covid.
During periods such as today, fragmentation of the softwood supply chain will always encourage some buyers to frequently switch suppliers in search of the cheapest prices. With such turbulent waters likely to be ahead TDUK encourages buyers particularly manufacturers to build partnerships with their softwood suppliers as the most effective means to minimize supply chain disruption.
The road ahead: 2027 and beyond
As we head towards the end of the decade and see a return to full construction demand across Europe, there is likely to be increasing pressures on available structural softwood supplies – but to some extent these can be mitigated. This could include greater use of engineered wood products, which achieve higher log utilisation and include an increasing proportion of recycled wood. It will likely mean wider acceptance of more utilitarian products which may not match the perfection of C24, often seen as the norm in UK construction. Products like UK grown C16, or structural softwood in pine and other less recognized species or – controversially – CLS products allowing a percentage of wane.
Of course, as mentioned earlier, some forest sources could potentially add to European softwood supplies in the future. Canadian forest resources are significant and will almost certainly become available once the economic conditions align. However, wood from Russian forests will take a significantly changed political landscape, and considerably longer before it could once again be accept in EU and UK markets.
While the further fragmentation we are likely to experience in coming years will often leads buyers to ‘chase the bottom’ on price – we strongly recommend, given the looming volatility, building long-term partnerships right across your supply chain to minimise disruption. This means all the way from supplier to specifier and all points in between, whether from sawmillers to importers, or from suppliers to manufacturers, specifiers and contractors. From forest, all the way to building site, TDUK is here to support these relationships.
