The Austrian pulp, paper, and panel industries are still trying to procure industrial softwood logs. The volumes supplied by the forestry sector are often insufficient. Timber harvesting and, as a result, the supply of industrial wood declined in May. In June, the situation will probably not change. Significant volumes of beetle-damaged wood are not expected before the end of July. The regions in Styria and Carinthia that were affected by snow breakage and minor storms are the only exceptions when it comes to the supply situation.
Smaller quantities of wood chips
The biggest factor contributing to the shortage is the continued, increased use of industrial softwood logs in the pulp industry due to reduced wood chip deliveries from sawmills. Exports have further reduced supply for domestic mills in recent weeks. The return of a Slovenian cardboard manufacturer to the southern Austrian pulpwood market was already noted several weeks ago. In northern Austria, deliveries to Czech pulp mills are increasingly being discussed. In some regions of Austria, wood-fired cogeneration plants, such as the one operated by EVN in St. Pölten, have been connected to the grid in recent months, or are about to be, like Tilly’s plant in Althofen/Carinthia. This also has an impact on supply. As for imports, deliveries from northern Italy in particular are decreasing.
Premiums, projects and long-distance procurement
To secure volumes, an increasing number of sellers of industrial wood are reporting premiums for the fulfillment of contracts. So-called “projects” involving purchases of standing timber by purchasing organizations of the pulp industry continue to have a relevant impact on the price levels, which deviate from those of standard quarterly contracts. Such activities remain at a high level. However, market participants believe that new contracts are past the peak now.
An additional factor that drives up costs or revenues, depending on the perspective, is the ongoing replacement purchases, especially by wood-based panel manufacturers. Suppliers in neighboring countries also frequently benefit from high prices, as demand had to be met through expensive long-distance procurement.
Not enough industrial beech log wood
In many cases, wood-based panel manufacturers had to respond to the shortage of recycled wood by buying industrial wood. This was often only possible by purchasing more industrial hardwood logs. At the end of the harvesting season in Austria, supply is at the same level as in previous years. Processing companies are reporting a shortage of industrial beech logs. As a result, they were not able to build up inventories to the desired extent.
At least for panel manufacturers, raw material supply has improved slightly in recent weeks. Due to the seasonally increasing construction activity and the activity of private consumers, more recycled wood is available than in April. However, prices for waste wood have risen and are higher than last year.
