Wood recyclers have reported a faster than expected return to near normality since Covid struck. That was the overall message at the WRA’s Autumn members’ meeting.
However, while incoming feedstock of waste wood has risen since June, it is still below the usual levels for this time of year, sitting anywhere between 70-90%.
Customer demand for material has also risen dramatically since June, but wood recyclers on the whole believe it will take six to 12 months or more before business will be back to normal. And that is on the basis that we don’t suffer a second major outbreak of Covid nationally.
The WRA Autumn meeting was once again held as a webinar and included market updates from Vicki Hughes of Enva, Mark Hayton of Egger UK, Stephen Martin from RWE, and Lauma Kazuša from Suez Trading Europe. Attendees also heard regulatory updates from Howard Leberman from the Environment Agency and Tunde Ojetola from BEIS. (see separate article).
Vicki Hughes told the meeting that following the re-opening of HWRCs, there was an initial strong recovery due to the increased DIY activity that had taken place during lockdown. However some HWRCs are still only operating at 50% capacity due to booking in systems and other restrictions.
Waste wood from the construction and demolition sector has seen a steady recovery while the commercial and industrial sector was the slowest to recover, with some areas still functioning on reduced capacity.
“We are now coming into the busy winter season for off-takers so we could well see a shortage of waste wood availability in the UK,” said Vicki. “There is uncertainty in the sector over the impact of a second Covid spike and whether that will cause another slowdown in business, which will affect general inbound wood flows.
“The other big issue is the reduction in availability of Grade A clean wood for animal bedding and panel board chip. This is partly because of an overall reduction in generation but mainly due to the increased demand from the small scale biomass plants, which is impacting on the sector’s ability to deliver recycling objectives.”
Mark Hayton told delegates at the meeting that the impact of Covid on the panel board industry had been massive, with order books collapsing overnight. However, there had been a surprising upturn in demand for products made from panel board in July and August, with some areas reporting sales figures as high as 120% compared to the same period in 2019.
“The demand has come from nowhere and was completely unexpected,” said Mark. “The building market has benefitted from an increase in consumer spend due to Furlough and people not spending on foreign holidays, which has helped tremendously.”
Other sectors that have caused an increase in demand for panel board include the caravan sector, which went from potentially making 50% of its workforce redundant, to having full order books for the next 12 months.
The associated changes to accommodation for students returning to university, and to workplaces for office workers going back to work has also helped.
The biomass sector is currently well stocked with feedstock, according to Stephen Martin of RWE, but will need a full annual cycle to fully re-establish maintenance regimes and stock.
Power demand returned to pre-Covid levels at the start of September although some plants have taken or are taking planned or extended outages. The sector is also concerned about the risk of a second outbreak of Covid, which would have a further impact on the availability of waste wood.
“Most plants believe fuel supply will be tight this winter and many received imports from Europe and have additional boats scheduled,” said Stephen. “I think the waste wood market will be balanced or possibly short of material when all new plants are running properly, which will open the door for alternative fuels to grow.”
Lauma Kazusa gave the meeting an overview of the European trading position, which she said was changing substantially. She said the UK is currently the fastest growing importer of waste wood, with the majority coming from Belgium and Ireland and that the UK is likely to become a net importer of waste wood very soon.
She said Brexit and Covid were reshaping the economic outlook with uncertainty around consumer confidence and manufacturing output. The reduction in manufacturing had also led to a reduction in waste being generated and a significant drop in demand for new wooden packaging such as pallets in the EU and UK .
“The Brexit negotiations, local or national lockdowns as a result of Covid, Government packages to boost the economy and the weather this winter will all have an impact on the future of waste wood,” she added.