Sawmill industry wants substantial log price reductions in the third quarter

Beetle-damaged wood is accumulating

Article by Gerd Ebner (translated by Eva Guzely) | 13.07.2023 - 09:39

Reports of increased beetle activity are coming in especially from southern Austria, the Czech Republic and the damage hotspots in Germany. The current heat wave will exacerbate the infestation. Thus, from July, increasing volumes of beetle-damaged wood can be expected. At the same time, demand for log wood is decreasing due to curtailments of production. The economic pressure due to the sharp fall in prices and the further “postponed” upswing puts pressure on the log price.

For the month of July, the Austrian sawmill industry wants a “90/60” price structure, i.e. €90/m³ for fresh log wood and €60/m³ for beetle-damaged wood. In the main damage hotspots in Germany, buyers are said to be asking for prices which are €5/m³ lower than that. Also, one request is made more often than before: “Preferably only beetle-damaged wood.” In the Czech Republic, too, weak demand and the accumulation of volumes of damaged wood similar to those of last year have resulted in lower log prices. As a result, the price is currently at around €85/m³ (free forest road).

Global prices as argument for price reductions

The Central European sawmill industry wants to become competitive again on the global markets – and in the US in particular – with lower log prices and the respective percentage of beetle-damaged wood.

For June, the Holzkurier identified a lower but uniform price range of €99 to €109/m³ in Austria and southern Germany, which is around €7/m³ below the one recorded in May. Contracts for the third quarter will likely see even lower prices.

Forest owners complain about the pressure on prices and, in particular, about the sluggish acceptance of the log wood and buyers’ failure to issue supply slips.