Empty up front, full in the back
"Empty log yard, full lumber warehouse," is painting a picture of the situation that spread across parts of southern Germany and Austria within just a few weeks. The fact that the supply situation could change so fast and drastically caught many people off guard. In part, this was caused by storms (e.g. in western Carinthia). An even more profound effect, however, had the reduced logging activities especially in small privately owned forests. "Green wood logging virtually grinded to a halt over the past months," forestry experts in Austria assess the situation.
Some even report that especially in the south of Austria, a kind of purchasing hysteria is emerging due to the lack of roundwood supply. While in southern Austria, the enormous amounts of precipitation caused this shortage, in northern and western Austria it is definitely due to the lower harvesting activities. In the north, green wood prices dropped by yet another €2/sm³ in the Q4. Evidently, this was the final straw because afterwards, the willingness to harvest shrank drastically.
Roundwood scarcity also in South Germany
At the same time, the phenomenon of low green wood supply levels extends to South Germany. There, supply started sinking around the beginning to middle of November, as well. All across Central Europe, even damaged wood supply started to become scarce.
Roundwood prices saw slight increase
The roundwood price level changed a little in November. In Austria, Timber-Online assessed a November price range of €66 - 82/sm³ (€+1.5/sm³). For Bavaria, the price range is €64 to 75/sm³ (€+1/sm³), and €66 to 73/sm³ (€+90 cents/sm³) in Baden-Wuerttemberg.
As for December, no significant price change is expected yet. Quite a different outlook, however, present the contract prices starting January. Depending on the initial price level, forest owners are already asking prices that are €10 to 15/sm³ higher. How much it will be in the end will be a matter of negotiations.
Suppliers as well as customers are aware that from April 2020, increasing damaged wood volumes will hit the market again. In spring, massive snow-break damages could come onto the market mainly as green wood in southern Austria and South Tyrol.
Lumber price declined slightly
The aggravated supply situation also impeded production. In November, this did not show an effect on lumber warehouses yet: They were exceptionally well filled. Accordingly, sales prices kept being under pressure. As for lumber, Timber-Online identified declining prices: Planed goods €-2/m³, chipper sideboards another €-1/m³. Fresh glulam lamellas remained on last month's level in Germany. For further processing products such as structural timber (KVH) (€-4/m³) and glulam (€-1/m³), declining prices were registered as well. This, however, falls in line with usual seasonal weakening.
Good prospects for 2020
In November already, many market signals began to indicate a very positive sales situation for 2020. The wood sector predominantly expects construction activities in Germany, Austria and Switzerland to keep the high level. Especially laminated timber producers would benefit from this. Based on their projected lumber order volumes, 2020 will be a good year.
