The lumber markets in Southern Europe, especially Italy, contributed significantly to this situation. So far, the downward trend predicted in April due to a potentially restricted log supply has not yet materialized. Also, the past and upcoming long weekends have not led to any significant curtailments.
Most sawmills have been and continue to be operating those days. Only the removal of the accumulating byproducts is causing difficulties for some sawmills due to the long weekends.
Contract quantities delivered ahead of schedule
Sawmills in western Austria were the only ones looking for buyers for their wood chips. This is due to the fact that quantities set out in contracts were delivered ahead of schedule to the buying pulp mills, not least due to high cutting activity. These preliminary contracts often involved a price level comparable to that in Germany and thus significantly higher. Accordingly, those sawmills have now made an effort to conclude new or follow-up contracts at a similarly high price level. Austrian pulp mills, at least, have not accepted those high prices. As a result, prices for dried wood chips have remained at the April level of €105 to €115/t in May, and even reached €120/t ex sawmill in individual cases. The April survey did not adequately reflect the higher prices in western Austria.
Completion of construction work at three sawmills
Compared to the high lumber production output throughout Austria, the three sawmills, which have completed extensive construction projects so far this year, play a negligible role in the sawmill byproducts market. The only significant interruption in cutting occurred at Pabst Holzindustrie in Zeltweg. After the first log had been cut on the new saw line in December, cutting capacity was gradually ramped up over the course of the first quarter. However, due to its own pellet mill, the sawmill plays only a minor role in the sawmill byproducts market. The two new bandsaw lines of Schaffer Säge-Holzexport, Eppenstein, have been in regular operation since the start of this year. The gangsaw line there was in operation during the construction work. At the Gebrüder Steininger sawmill in Rastenfeld, where the saw line for large-diameter logs is currently being put into operation, there were also hardly any changes in the volume of sawmill byproducts accumulating during the construction phase. According to the company, production was carried out in three shifts on the existing chipper line during this period.
Pellet production still high
Unlike in Germany, Austrian pellet mills continue to operate at a high level., in Austria, however, production volumes are increasingly intended for storage. In this context, it is advantageous that the silos for the finished product of most pellet mills were only partially filled at the end of the first quarter. Demand for pellets has recently decreased both in the domestic market and in Italy. As a result, the currently available storage capacity in silos will also run out in Austria in the coming weeks. As of mid-May, pellet production is expected to remain at the current level until early or mid-June.
Despite the low selling prices in the retail business (in some cases, prices below €200/t ex works for loose pellets are being reported again), integrated production facilities, in particular, are forced to pelletize chips due to a lack of alternative sales channels. For example, chipboard factories still show little interest in chip deliveries. This applies especially to additional quantities accumulating due to the high level of cutting.
In Austria, the supply of sawdust increased compared to April, partly due to decreasing exports. Significant quantities of sawdust were delivered to German pellet mills, especially in the first quarter and in April. Due to earlier curtailments of production in Germany than in Austria, those exports have recently played a less important role.
Despite the supply, the price pressure expected for wood chip deliveries to stand-alone pellet mills in May did not materialize. Therefore, the price level for dried sawdust and wood chips for the pellet industry remains at €110 to €120/t ex sawmill, the focus being on €110/t ex sawmill. Due to quarterly contracts, deliveries of dried wood chips to the wood-based materials industry remain in a range from €90 to €100/t ex sawmill.
