Upswing with an expiration date?

Increases as planned, tougher situation starting in February

The theoretically necessary level of the upswing was already clear in December: After the increase in log prices, the prices for lumber and processed products followed suit. One month was not enough to close the gap between log and lumber prices. To close the gap, further increases in lumber prices are necessary, which many manufacturers have already implemented for February. As dynamic as the market was in December, there was a certain slowdown in January, which intensified at the beginning of February. In March, the upward trend of the market will likely continue. The only question is at what pace. After all, the leading timber groups already found it much more difficult to raise their prices in February.

In Central Europe, an unusual east-west price gradient is developing depending on the log supply situation. The price of log wood is constantly increasing from Baden-Württemberg via Bavaria to (northern) Austria. It starts at just under €100/m³ in the west, whereas prices around and well above €110/m³ are now common in Eastern Austria. And the further east you go in Europe, the higher the prices are.

Ideal harvest weather secures log supply

In January, the weather in southern Germany and Austria was ideal for harvesting log wood. As a result, an unexpected volume arrived at the sawmills. On average, all processing companies are well supplied with log wood. In some cases, buyers can already avoid the highest prices and are able to change suppliers. The fear of not having enough log wood is slowly disappearing. Even so-called “Bauernbuckel” (“farmer’s humps”, harvesting of bigger volumes before work on the fields resumes) seem possible again this year for the first time in many years.

It can be assumed that sawmills probably pay €130/m³ for log wood entering their log yards. As a result, practically no sawmill can sell lumber for less than €200/m³ even with a good yield. Based on this calculation, the situation is still very tense for Central European sawmills. In January, the Holzkurier identified month-on-month price increases ranging from 9% (machined sideboards in Italy) to 15% (laminations for glulam in Germany).

Central European laminations more expensive than Swedish ones

According to the Holzkurier’s research, the visible-quality laminations for glulam cost around €255/m³ (fresh, in bulk) in January. Thus, the price increase implemented by Central European timber companies was significantly higher than that of their Swedish colleagues.

When it comes to glue-laminated timber itself, manufacturers reached their minimum goal of charging €500 or more in January. They did, however, clearly miss the maximum target of around €530/m³. Accordingly, the Holzkurier identified a price range of €500 to €520/m³ in Germany. In Italy, the price level is higher by €10/m³, and the price level for visible-quality glulam in France exceeds the Italian one by another €20/m³.

Sawdust cheaper again

The weakness in the pellet market has a direct impact on the price of sawdust. In Austria, prices fell by around €3/st or 18% around the turn of the year. As a result, sawdust now costs only €13 to €15/st. As for wood chips, prices remained nearly constant at the level recorded in December 2023, i.e. at €16.2 to €18.2/st.

The lower demand from the pellet manufacturers leads to growing piles of sawdust in the sawmills. The quantities requested by customers are low for the season. The fact that alternative buyers, such as the panel industry, have been using mostly waste wood for several years now has a negative impact on sawdust suppliers. Leading companies in the panel industry only need the technical minimum of sawdust.

Constant prices and demand for wood chips

In the case of wood chips, however, there is a constant flow of quantities to the paper industry. In Austria, “the upgrade of the Gratkorn production site” is highlighted as a positive factor for sales, among others.