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sales indicator june 2020

Surreal market situation

Article by Gerd Ebner (translated by Eva Guzely) | 08.07.2020 - 10:42

Despite this trend, there is a “surreal euphoria” among many companies. The mood is surreal because for many companies, the feared COVID-19 repercussions were less serious than expected – and now, they are surprised by the order situation. Often, order books are full and prices are mostly fixed on a constant level for Q3. Partly, there is even hope to compensate the sawn timber price corrections of Q2 in the near future.

The downturn will come

At the same time, every manager knows that a downturn in the global economy is inevitable, and that it is bound to have negative repercussions for the timber industry. However, at least the coming three months seem to be manageable for most interviewees – and optimism prevails.

It can be often heard from market participants that this year might see “an early winter”. At the moment, though, sales are going well north of the Brenner Pass. Sawmills further raised cutting in June, and processing companies’ is at a high level in Central Europe. As a result, prices are rather stable. According to Holzkurier’s survey, prices of visible quality laminations for glulam range from 178 to 185 €/m³ (fresh, without transport costs) in June.

Corona-related decreases repairable?

The good order situation of processing companies gives reason for hope. In Germany, those companies were able to fully supply their customers basically without a “winter and corona break”.

Rising glulam prices

At the beginning of June, glulam prices were raised in Germany. The targeted +10 to +20 €/m³ have not yet been implemented extensively. Holzkurier recorded a slightly higher price level in June (391 to 410 €/m³), but the trend is clearly an upward one.

Lately, delivery times of up to three weeks have become normal for glulam. This resulted in an usual market situation, in which delivery times of the hype-product CLT are shorter than those of glulam. Bigger construction projects – the domain of CLT – were partly put on hold in Q2. Additionally, there are new CLT productions in Germany and Austria.

No recovery of Italian glulam demand yet

Italy’s glulam demand increased considerably, but it still remains below last year’s level. Prices still range from around 380 to 400 €/m³. The non-visible quality market in Italy, on the other hand, changed completely. Due to the lack of the respective laminations in Central Europe, their value increased in two rounds of price rises. The difference between visible quality and non-visible qualities normalized again.

Discontent with credit insurers

The behavior of credit insurers is starting to become a veritable problem for timber companies. Interviewees from the timber industry complain about random reductions in credit limits without nearly any credit rating of customers.

One of Austria’s leading timber companies, which operates basically without debt capital, had itself assessed. The result of a renowned credit insurance company: The industry leader got a medium credit rating. The high demand for main assortments leads to a higher production of byproducts. In June, sideboard prices fell again in Italy. According to Holzkurier’s research, free border-prices range from only 115 to 123 €/m³ which is around 2 €/m³ less than in May.

Garden wood and DIY are pushing sales

Big German timber merchants are seeing record month after record month. The segments DIY and garden wood are the motors of this development. Larch is particularly popular. Siberian larch is starting to become scarce due to the mild winter and the resulting decreases in harvest.