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Tight wood supply and demand causes "sharp" fall in gate fees

Wood waste arisings have dropped by 10% during the past three years which, coupled with an increase in demand, has lead to a sharp fall in gate fees.

A WRAP study, Realising the Value of Recovered Wood, has found that, since January 2009, gate fees for high-grade material have fallen by between £2 and £25/tonne to between £7 and £12/tonne in early 2011 - a 50% fall for top-end material. This has led to some reprocessors predicting that gate fees for clean wood “may become a thing of the past”.

The reason for the trend is the change in supply and demand in the market. Wood waste arisings have decreased by 0.4 million tonnes from 2007, when it was estimated that 4.5 million tonnes of wood waste was available as a result of less being consumed in the UK. In 2010, it was calculated that there was just 4.1 million tonnes of wood waste in the UK.

Demand for wood waste has grown in the UK because of the burgeoning biomass industry securing wood waste as feedstock for facilities. Wood waste used for energy recovery in 2010 was more than double that in 2007, while the export market has grown 13-fold since 2007, sending a further 200,000 tonnes of wood overseas.

WRAP director of closed loop economy Marcus Gover said: “This [report] should enable businesses to become better informed, increase transparency across the marketplace and provide evidence to support business decisions.

“It is easy to put the wood waste arising down to a reduction in construction activity during the recent economic downturn. But it is also important to note that the construction industry - one of the biggest contributors to wood waste arising - has also taken proactive steps to cut the amount of wood it sends to landfill.”

The report found that wood consumption had decreased by three million tonnes (23%) from 2007 to 2009, although from 2009 to 2010 it improved by 4%. The main factor for this is the contraction in the construction sector and reduced expenditure on furniture manufacturing and output. Wood consumption by the UK furniture and manufacturing sector fell a third from 2007 to 2010. Packaging wood waste has also decreased (see MRW story).

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