Damaged wood supply increased again
Another marked decrease was recorded in log prices in Southern Germany and Austria. This should mainly be due to the higher supply of damaged wood and not so much because of possible falls in demand as a result of the Covid-19 pandemic.
The higher supply resulted from the numerous winter storms which have led to quite considerable volumes of damaged wood in some regions. In Alpine regions, damage was also caused by snow. In Southern Austria in particular, the early snowfalls of November 2019 caused at least 1.5 million m³ of damaged wood, which have to be harvested and marketed under the most difficult circumstances.
Price gap continues to widen
In the bigger region, the price gap is enormous with prices for spruce/fir, B, 2b ranging from 60 to 85 €/m³. Thus, a level has been reached which is 8 to 13% lower than that of April 2019. Discounts for bark beetle wood can reach up to 35 €/m³.
The high log wood supply faces a very differentiated market. Processing companies’ demand is very high, which means that cuttings for glulam, panels or CLT find buyers quickly. At some processing companies, raw goods stocks were very low in April.
Lower quality
Around the main “epicenters” of bark beetle damage (Central Germany, Northern Austria, Czech Republic), there is partly a lack in high-quality goods. In those areas, harvest activities obviously focus on the removal of damaged wood.
Chipper sideboards are still under pressure. Packaging companies’ demand has fallen sharply. In Italy, it is estimated to be around 40% lower than normal. However, producers expect first increases in demand in mid-May.
Asian demand grew lately
Due to Covid-19 and Ramadan, there is little activity in North Africa. Lately, a ray of hope has been coming from Asia: China and, tentatively, Pakistan can be named as examples.
Solid structural timber and glulam producers, whose target markets are Germany and Austria, report a very good order situation. Here, a raise in prices are announced for the beginning of June: +20 €/m³ for visible quality. In terms of quantities, companies work nearly at capacity. However, the lack of export markets (Spain, France and Italy, of course) put prices a bit under pressure lately.
