In May, prices were still as high as €125/m³. For industrial log wood, prices of €85 to €90/m³ cfr are charged. Here, the decrease is even smaller than for sawlogs and pallet wood. As a result, producers of wood-based panels as well as paper and pulp mills are increasingly rejecting Irish log offers.
Logistics costs drive up prices
Prices for Irish storm-damaged wood remain high © Pirchmoser Timberwoods
The persistently high price level for sawlogs, pallet wood, and industrial log wood can only be partially attributed to the demands of Irish forest owners. Almost all surveyed log traders who operate in Ireland report above-average logistics costs. These start with the transport of the storm-damaged wood from forest roads to shipping ports. And since cabotage regulations have not been relaxed, the use of foreign log trucks remains complex and expensive. Terminal handling charges make up a particularly large part of the overall costs: At around €15/m³, they are much higher than the sums payable in comparable ports in Central Europe, the Baltic States, or Scandinavia. Due to the limited port infrastructure – only smaller ports with ship capacities of a few thousand tonnes are available – sea freight costs are also above average. In total, logistics costs of well over €50/m³ are reported for transport from Irish forest roads to the ports of mainland Europe.
Lack of follow-up orders after initial shipments
Central European companies are still interested in Irish storm-damaged wood. Just recently, a shipment arrived at a Baltic Sea port and was transshipped onto a train bound for a large sawmill in southern Austria. However, hardly any follow-up orders have been placed. Continuous long-distance transport, as was the common practice for some time after previous storm events, has so far been non-existent. Regular deliveries to Central Europe are only made to two industrial wood processing companies with production sites in the UK and the Benelux countries, where freight rates are favorable. However, the volumes in question are part of preliminary contracts concluded before the storms. Exports to the UK, too, are based on long-standing business relationships.
Meanwhile, Scandinavian timber industry companies are increasingly withdrawing from purchasing in Ireland. On the one hand, demand from Scandinavian production sites has decreased as a result of shutdowns and production curtailments. On the other hand, prices for industrial log wood have recently fallen so sharply in Sweden, Finland, and Norway that the first log deliveries are now being made to Central Europe instead. Market observers interpret the increasing reluctance to purchase Irish wood as a deliberate attempt to put pressure on local suppliers – there is even talk of a de-facto boycott.
Payment default in private forests
In some Irish private forests, processing is being delayed. There are signs of major log trading companies defaulting on payments. In this context, the Irish Minister of Agriculture called for caution when concluding contracts in mid-July. Apart from the volumes processed on behalf of the affected company, no further unsold batches are known.
It is becoming increasingly clear that the processing of the damaged wood will be spread out over an extended period of time. The live conservation strategy appears to be working in the bark beetle-free country. The Irish sawmill industry continues to have free capacities. As a result, neither the Coillte State Forestry Company nor private forest owners are under any pressure to act. Coillte even plans to extend processing until the end of 2026. Furthermore, a decision on the creation of large log storage facilities is also expected in the coming weeks.
In addition to the State Forestry Company, Irish sawmills, especially those specializing in pallet lumber, have also begun building external storage facilities.
Sawmills in Central and Eastern Europe which received Irish storm-damaged wood early on are now expressing dissatisfaction with the lumber produced from it, as both quality and yield have often fallen short of expectations.
