Log price rising but more slowly than the lumber price
Currently, the value chain starting with forestry is seeing a probably unprecedented upward trend. Since September 2020, there has been a complete decoupling of the lumber price from the log price even in regions which are not struggling with the accumulation of damaged wood. In February, the log price rose in all of the analyzed regions. However, it has not even reached the average price level of 2006-2021.
The situation is completely different when it comes to lumber and processed products. In February, prices of the following products reached the highest – and partly historic – levels since 2006:
- solid structural timber (KVH)
- chipper sideboards in Italy
- rough sawn timber in Italy
- laminations for glulam in Germany
- glue-laminated timber in Germany
- glue-laminated timber in Italy
All of these are either construction products or products which are used in some way in the construction sector. The fact that their prices rose in winter contradicts all logic. It is possible that each one of these products will see a further marked increase in March.
Partly massive increases
Many companies already announced further increases at the beginning of March. The jumps in prices are significantly higher than they have been in the past few years. There are products whose prices have gone up by € 50/m³ since December.
In Italy, glue-laminated timber passed the € 400/m³-mark in September. Six months later, the price is approaching the € 500/m³-mark which has already been reached in Spain, for example. Many market participants expect prices to reach even € 600/m³ this year.
US one reason, but not the only one
One explanation for this extraordinary development is the US softwood lumber market. The European timber industry is earning more with planed boards in the US than with glued timber products in Europe. Another explanation is global demand for various lumber assortments. The rumor about a Canadian packaging company contacting a medium-sized German company for lumber says it all. From North Africa to India and China – softwood lumber supply is currently a bit scarce all over the globe.
More free time, more money, change in lifestyle
The pandemic and the measures taken to fight it led to an increase in remote working, and with travel becoming mostly impossible, a global DIY boom set in which keeps boosting demand and prices. Plain and simple roof battens are becoming high-end DIY store products.
At the same time, it is mostly China which contributes to rising raw material prices: steel, cement and – at least indirectly – also wood prices. When, for example, Ukraine has China as a lucrative alternative to the German and Italian packaging markets, products are scarce on said markets.
