Processing companies in Lower Austria are concentrating on taking over the contractually agreed volumes. It has been known for some time that forestry companies, forest owners, and timber traders in Lower Austria have high inventories of energy and industrial log wood in forests. Now, similar developments are being reported from Tyrol. Power plants there have also reduced or shut down production due to low electricity prices after the end of the heating season. After a temporary upswing in demand for industrial log wood from Tyrolean wood-based materials manufacturers, purchasing activity is subdued again.
In Salzburg and Upper Austria, suppliers of industrial log wood have benefited from growing demand in the wood-based materials industry. Already at the end of the third quarter, there were signs of an increased purchasing activity. Consequently, in these federal states, volumes of purely coniferous industrial wood and also single-variety industrial hardwood logs have been rapidly depleted. The remaining forest stocks often include mixed consignments.
In southern Austria, coniferous industrial log wood is being transported to the pulp industry’s mills or external warehouses as planned. After the roadblocks have been lifted, the accumulated volumes are picked up and delivered. In May, price negotiations only took place whenever preliminary contracts were valid until April or had been extended. In those cases, the prices valid until then were carried forward until the end of the second quarter.
Overall, processing companies are interested in locally sourced industrial wood. In this context, the difficulties of rail transport for long-distance deliveries are repeatedly highlighted. In fact, wagons for the transport of logs and wood chips are scarce throughout Europe. Rail deliveries coming from Germany are considered to be especially difficult. Many railway lines are overbooked. And, since many lines in the German rail network are closed due to improvement works, trains are often diverted over large distances, which further increases logistics costs. In the coming months, at least two panel factories in western Austria expect to see a decline in production, which would result in lower demand for wood. Added to this is the substitution of fresh wood with still-cheaper old wood. For pulp manufacturers covered by the paper industry’s collective agreement, there is a certain risk of industrial action in the coming weeks with regard to capacity utilization. The Austrian Trade Union Federation granted the strike permit on May 9. One pulp mill is keeping its inventories as small as possible until the start of overhaul work in November in order to be able to accept wood during construction work then.
At the pulp mills which are processing industrial beech logs, production is expected to remain at a high level despite the tense situation on the sales markets. However, given the inventory levels, no change in demand or an increase in purchasing prices is expected in the third quarter.
