Chinese lumber processing companies, in particular, are pushing for additional price reductions. When making deliveries to the US and other countries that invoice in US dollars, however, sellers would actually have to raise prices to offset the lower margins.
Shippers do not yield to Chinese pressure yet
Following the price reductions in the first quarter, there have been no further discounts in China. Instead, orders have been very subdued. The search for cheaper beech lumber suppliers is reflected in the recent significant increase in inquiries at Central European sawmills and exporters. However, actual orders are placed only in a few cases.
In China, sales prices of €500 to €550/m³ cfr are reported for non-edge-trimmed, purely A-grade beech lumber (26 to 52 mm). This is too expensive for many companies in China, not least because of the exchange rate. Instead, they purchase the so-called “China-AB” products which cost €420 to €450/m³. The lower grades, which are hardly in demand anymore, are sold for €320 to €360/m³ in China. Purchase prices in Central European sawmills for A/B grade lumber range from €370 to €420/m³, depending on the thickness. B/C grade lumber is sold for €210 to €250/m³ ex sawmill to China. Thus, both purchase and sales prices have remained stable.
However, all forecasts by economic experts assume that exchange rates involving a strong euro will remain largely unchanged in the foreseeable future. As a result, it can be expected that Chinese customers will prevail in their demands for price reductions in the medium term. However, the still-unresolved tariff negotiations between China and the US remain an unknown factor in this equation. High tariffs could lead to higher demand for European lumber in China.
Trade agreement between the USA and Vietnam
In the first few months of the year, Chinese demand for non-edge trimmed lumber was weak. Over the past two months, it has picked up somewhat, at least according to some sawmills. For other companies, which have reported below-average business in China this year, the situation has deteriorated. Suppliers of edge-trimmed beech lumber, on the other hand, remain satisfied. Many of them mention new contacts in Asia, which were established at the Interzum furniture supplier trade fair. This also included a higher number of inquiries from Vietnam. Exporters expect that beech will also benefit from the trade agreement concluded between the USA and Vietnam on July 2. This assessment is somewhat surprising, given that the agreed 20% tariff on imports of Vietnamese goods into the US represents a significant burden for furniture manufacturers and component producers.
Shortages could facilitate price increases
Shipping volumes of edge-trimmed beech lumber to China, the US, and Mexico are still at a satisfactory level. The shortages in some product ranges, which were already evident in recent months, have continued. Consequently, manufacturers are considering to raise prices, at least for these specifications. As of the beginning of July, the price lists last revised in September and October 2024 were still valid.
Squared timber and pallet boards to the Benelux countries
When it comes to beech sawmills specializing in squared timber and pallet boards, market assessments vary depending on the sales markets. Companies with customers in Italy and the Benelux countries report brisk demand. In some cases, higher prices were achieved in those markets in June. Sawmills with customers in Germany, on the other hand, are dissatisfied with business developments. The placement of orders there depended largely on prices. Sawmills were either willing to make concessions or were unable to implement their announced price increases. For fresh squared timber with pith, the price remains at €250/m³ ex works. Prices for squared timber cut from solid wood without pith range from €300 to €330/m³. As for pallet boards, the price range has narrowed compared to early summer, at €280 to €350/m³.
