The boost came from practically all products: from sawn timber as well as from processed products and pellets. The assortment, from which not all European sawmills can profit directly, i.e. 2-by-4 in the US, made the biggest jump. Compared to August, the price rose by 28%. Year on year, it even rocketed by 115%.
Log price lags behind
The recovery on the sales market is not yet reflected to the same extent in log prices. Increases range from 3 to 5 €/m³. In September, contracts were mostly continued. However, there are going to be price increases in the last quarter of this year. In Austria, a good part of the fresh wood is expected to “have an eight in front” in Q4, i.e. it is going to be sold for more than 80 €/m³. In Southern Germany, marked price corrections are expected as well.
Boom of all things “constructive” – DIY, renovation, new construction, garden wood
Demand for processed products for constructions remains strong. There are delivery times even for mass products such as glulam posts. Delivery times can reach up to six weeks and are still longer than those of cross-laminated timber. It is thus not surprising that another rise in glulam prices is pending in Germany in Q4. Prices could go up by another 15 €/m³.
Demand for glulam must have seen a marked increase this year. Producers and merchants estimate it at +100,000 m³ in Germany and at +50,000 m³ in Italy.
The development of solid structural timber (KVH) is similar, and maybe even more extreme in its dynamic. Driven by a very high demand (prefabricated houses, renovations, new constructions) and a very positive outlook for 2021 as well (order situation of the prefabricated house segment), there is also a scarcity of raw material. The US market has an influence on the production program of many sawmills. Many switch from the cutting of raw wood for KVH to US products. Also, the supply in (damaged) wood is not sufficient anymore for the production of solid structural timber.
Full throttle until the end of the year
Many big timber companies have their commitments to prices and volumes for Q4 signed and sealed. This is how it can be summed up: “The guarantee on volumes had priority, prices are currently secondary.” The sector expects to be at “full throttle until Christmas”. At the turn of the year, stock levels of finished products are likely to be relatively low.
Obtaining log wood in the right quantities and qualities is seen as the biggest challenge in the final quarter of 2020.
