This piece was written and provided by FTMA Silver Sponsor, AKD Softwoods.
Welcome to 2022 and AKD’s first article in FTMA News for this year.
The start to 2022 has not been without its challenges, however whilst we face the enormous task of recovering from the flooding along the East Coast and the many difficulties this creates, we choose to focus on the positives.
Our AKD Queensland Site, located in Caboolture, was heavily impacted by the floods with short-term closures and some loss of stock. Our main processing areas of both the greenmill and the drymill thankfully remained above water but some infrastructure and services on the site were impacted, affecting production for only a short period. Most importantly though, our employees were safe with their homes all intact, of which we are grateful.
AKD Caboolture site image during recent floods
AKD would like to acknowledge the incredible work of our Caboolture employees during this difficult and trying time, especially after the past two years and other set backs they have faced. Countless hours on weekends were put in by employees, making sandbags and cleaning up the flooded site. We are very proud of the Caboolture Team for their ability to rally together, and we thank them all for the enormous amount of work that has been put in.
Our thoughts go out to all those impacted who are now still cleaning up their homes, businesses and communities.
There has been some helpful information circulated by FTMA about care and maintenance of water impacted timbers (Kersten’s email from 4/3/22 titled Timber Moisture & Storage) so we encourage you to share this information with your customers.
AKD Caboolture site image during recent floods
Outlook for Structural Softwood Demand
Using our modelling, which includes use of some external data sources from BIS Oxford – mainly the detached house commencement forecasts – along with our observations and your feedback, still suggests that the peak demand quarter in this current ‘super cycle’ of demand will be September 2022.
Note below our forecast for quarterly structural softwood demand in Australian until end of FY23. To put this in perspective, the forecast peak of Sept’22 quarterly demand is estimated to be 40% above Sept’19 quarter, 31% higher than Sept’20 quarter and 12% up on Sept’21 quarter.
As always, this outlook remains fluid as our supply chain continues to deal with the challenges of building materials, supply consistency, labour shortages and extreme weather.
The reality we now face is the much longer home building construction cycle. With detached house commencements being the driver of our structural timber demand, the pipeline of demand is being stretched out and seems likely to help soften the difference between new house approvals declining and structural timber supply coming into some sort of balance towards the end of this calendar year.
Our current view of structural softwood demand in Australia is that FY22 demand will be up another 8% on FY21, but of course, remembering that FY21 saw a massive increase of 28% over the prior year. FY23 will be a more modest year for demand, forecast to be up 4%.
The structural demand outlook, medium and long term, is extremely important as we need to provide reliable information today about our supply to customers this month and to ensure we do everything to keep our delivery promises. Getting this balance of keeping our promises and not being too conservative with our commitments is an on-going challenge that we hope to continuously improve.
At AKD, we continue to strive to be approachable and personally focussed with our customers each and every day, whilst planning for the longer-term view. Part of that is to grow our supply to the Australian market in the coming years with significant investments at all of our Sites to enable more processing capacity, improved yields and improved quality.
Thank you for being on the journey with us, through thick and thin.
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