Falling sawn timber prices in 2019

Article by Philipp Matzku (adapted for; translated by Eva Guzely) | 18.03.2020 - 08:35

With a total of 93 million m³ in 2019, the global softwood log market remained basically unchanged compared to 2018. 45% of exports were shipped to China. Log prices continued to fall on all continents. The most marked decrease in prices was recorded in Central Europe. In Q4 2019, the global sawlog price index (GSPI) fell for the seventh consecutive quarter to the lowest level since 2016. This is according to Wood Resources International (WRI).

In 2019, both pulpwood indices have been falling for four consecutive quarters. The softwood pulpwood index lost another 2% in Q4 2019 and reached the lowest value in two and a half years. The hardwood pulpwood index decreased by 3% compared to Q3 and fell to the lowest level since Q2 2017.

Pulp deliveries saw a 3.5% year-on-year increase in 2019 which was mainly due to a strong second half year in the pulp segment. Imports to China alone rose by 16% compared to the second half year of 2018.

Profits of sawmills in the south of the United States reached record levels in 2018 but have been falling steadily ever since and were below the ten-year average in Q4.

According to WRI, Russia outperformed Canada in softwood sawn timber exports in 2019. The main reason for this is the decrease in Canadian exports and the increase in Russian exports to China. Timber imports from overseas markets to the US rose to a new record percentage of 14% of overall US imports in Q4 2019. Germany, Sweden, Chile, Brazil and Austria are the biggest softwood sawn timber suppliers. China increased its imports in 2019, although 28 million m³ (+15% compared to 2018) were not unloaded in the ports.

Global pellet trade also reached a record high last year. Almost half of the pellets was exported to Great Britain and Denmark. In almost all European countries, pellet import prices rose in Q4, with Belgium recording the biggest increase of 14% year on year.