Some companies have already revised down their targets for 2020, while others still expect to reach them – albeit with great difficulty.
Industry insiders estimate the fall in demand at 10 to 20% – based on the level of the very good last year and the situation at the beginning of this year. Accordingly, CLT producing companies still share at least 80% of a demand which has grown massively in the past years.
So far, companies report mainly delays in demand. In the past two months, numerous projects in the entire world have reportedly been stopped temporarily due to the shutdown with projects in Asia, Italy and Great Britain being affected the most. In the DACH region and Scandinavia, the situation is much better thanks to relatively few restrictions imposed so far. For many, business was particularly good in Germany, while the three-week standstill of the big construction companies in Austria could be felt clearly. The month of April is described as particularly challenging. Since then, however, things have been picking up.
When it comes to prices, little has changed in the past months. Only in some cases, producers report a price competition especially for big quantities or orders placed on short notice. However, the pressure on CLT prices seems to be much lower than that on glulam prices.
Many of the orders which are currently being processed, were placed or at least planned before the corona crisis. The development of demand in the coming months will be decisive. In this context, the main questions are how investors are going to react to the situation and whether planned projects are going to be postponed or even canceled.
Producers expect to be able to judge the actual repercussions of the corona pandemic on the cross-laminated timber market only in the second half of 2020 or even in 2021. Currently, companies are moving slowly and cautiously and try to make the best out of the situation. However, the majority of producers expect a further improvement of the situation in the coming months with a gradual recovery of markets. “There is light at the end of the tunnel and there is no train coming up our way,” one market participant says.
One must not neglect to mention the additional CLT production capacities which are going to enter the market this year and in the coming years. In Carinthia alone, another two big plants with a total annual output capacity of 250,000 m³ are to be started up in 2019. Here, industry experts expect an excess in supply – at least in the short term.
In the medium and long term, the sector expects a further growth. The demand for housing space, especially in urban areas, remains high and modern timber constructions are the ideal solution for satisfying the demand. The consensus among CLT producers is that the coronavirus is not going to stop this trend.
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