As you were aware we got a lot of questions why prices were so high this season so we gave you a full explanation as to why BUT the GOOD NEWS is prices are starting to come down, our international transportation has settled down and we are seeing small price reductions here plus the most important part is that the raw material drying costs have come down so we are seeing price reductions in our supply chain.
We always said when cost prices come down our prices to you will come down so thats exactly what we have done
We are getting a lot of questions why prices are so high this season so we thought we owed you an explanation and we hope this helps you to understand what is going on in the marketplace today and we hope you understand this is totally outside of our control and how we are having to cope daily with these issues and we can assure you we are not making any more profit than we need to run the business with all the costs incurred, in fact on some occasions we are losing out as each load/container is coming in at a new price.
As you know the war between Russia & the Ukraine has forced fuel price rises both here in the UK and worldwide to spiral out of control, for both domestic and businesses alike. Energy prices rose sharply when lockdown lifted and the economy began to return to normal. They have also increased significantly because Russia has sharply cut its supplies of gas to Europe. This has pushed up the price of gas across the continent, including in the UK and for the wholesale electricity market, there has been a reduction in available power supplies compared to last year which, combined with higher gas prices, has led to an increase in the wholesale price of electricity plus an increase in network and policy costs pushing prices up to double what they were a year ago
The Kiln Dried Logs we sell are all imported from Northern European Countries as we can't source hardwood kiln dried wood here in the UK and every season would normally incur a slight price increase but this season things have changed dramatically for the following reasons
Wholesale raw material costs for wood purchased at State Auctions from bidders is fierce and cost prices have tripled this season. The reason is before the Ukrainian conflict there was timber supply from Russia for others which helped stabilise prices but the main bidders are now biomass suppliers and wood pulp factories in Sweden, Norway, Finland who are able to pay more than the Log Industry can afford so they are pushing up auction prices, and now there is extra high demand from Germany. Ash and Oak supplies from the Regulated State Auctions are now nearly depleted and there will be very little supply for the rest of this season and we do expect it will run out regularly. Add to the supply issue the costs of drying. Drying costs in the Kilns, whether by gas or wood have risen by well over 200% to get the wood down to a moisture content of under 20%.
Not only have fuel costs risen but labour costs have risen to help cover the rising cost of inflation in Europe
Then this has to be transported to the UK in containers and heres the double whammy, container prices have doubled as there has been a shortage plus the fuel used to transport these containers has suffered price increases too. and basically there is now not enough Hardwood either from Importation or home producers to service everybody. On top of this Kiln Dried Ash comes with extra costs incurred as the UK Forestry Commission open and check every consignment of Kiln Dried Ash and charge us a sizeable fee to do this.
We also are affected by the Euro exchange rate which fluctuates daily and can greatly impact on the prices as we pay
We operate a daily stock control as each new delivery of wood has suffered price changes and if you consider a container only carries a limited number of columns of wood it is easy to see how many containers we can go through each day and that is why prices are continually changing daily / weekly.
We incorporate the shippings costs here in the UK to you within your price but again these charges have risen dramatically by over 20% and carry extra fuel surcharges on top of published prices as all businesses are feeling the brunt of the increasing fuel costs.
You may not be aware but a lot of heat logs and briquettes were produced in Russia and we will not import Russian products now or in the future so everyone has had to source alternative suppliers causing a major shortage worldwide.
Heat Logs are made from compressed sawdust and previously sawdust which has to be dried down to a very low moisture content prior to compression and again these producers are suffering from all of the above issues.
We have sourced New Heat Logs & Briquettes this season and they are a great alternative to Kiln Dried Logs but they are suffering all the same issues but if you can't get logs do try Heat Logs as we rate them very highly.
So what we are really trying to say is that UK gas & electricity costs have basically doubled this Autumn (and may rise further) and unfortunately kiln dried logs and heat logs being a fuel have been affected in the same way due to worldwide energy prices