25HK_softwood lumber production AT 2008 - 2020.jpg

Austrian softwood lumber production from 2008 to 2020 © Timber-Online

austrian timber industry association

Easing of the situation from autumn

Article by Gerd Ebner (translated by Eva Guzely) | 10.06.2021 - 10:11

Herbert Jöstl, President of the Austrian Timber Industry Association, proudly reported that Austria produced 10.6 million m³ of lumber last year, that is 100,000 m³ more than in 2019 and also the highest output since 2007. “In the second half of the year, we had both the raw material and orders, and we were on full throttle. However, it is impossible to reach the record production of 2004, i.e. 10.93 million m³. Today, the drying and processing volumes are simply too big,” analyzed Jöbstl.

Majority of exports to the EU

It was clear to the speakers that the journalists would want to obtain information on skyrocketing prices and the limited availability of wood. That is why Jöbstl already pointed out in the opening statement that the EU (75%) is the main market for Austrian softwood lumber exports whereas the US export share (4%) is very low.

Growing global demand for wood

In 2020, the demand for lumber increased worldwide. “There was a global boom in the construction industry,” said Jöbstl. Despite production having been at capacity, stock levels have not recovered since the subsidy programs of governments around the world have had their full effect. “We produced more and exported less. This shows that the domestic market is our top priority.” Jöbstl admitted though “that we were all surprised by the strong demand from June 2020. Otherwise, we would have stocked up our warehouses to the roof back then.”

When it comes to building materials, the development of iron and steel prices was “already extreme in previous years – while lumber prices were comparatively more stable at the time,” analyzed Deputy Chairman Dr. Andreas Ludwig, and Prof. Dr. Christian Helmenstein of Economica added: “The consumer price index increased by 47% since 2000. The index for wood only recorded a 40% rise in 20 years.”

Log price follows lumber price

Answering a journalist’s question as to why forest owners have not yet felt the increases in lumber prices, Jöbstl stated that log prices have seen a relative increase similar to that of lumber since late summer 2020. However, while the lumber price index is already at the record level of 141.5%, the log price index is at 119% and has thus not yet reached the levels recorded from 2012 to 2015 (over 130%).

Jöbstl identified regions on the global market where demand for softwood lumber is already leveling off. “I can imagine that in Central Europe prices will peak in autumn,” was his assessment. “We will continue to produce at full capacity so that we can soon return to reliable delivery times.”

“Market regulates itself” vs. “demand for a ban on exports”

The Federal Timber Construction Guild calls for a ban on the export of wood products. This demand was rejected by the three chairmen. “We have to keep the free market. Supply and demand will create a reasonable price level.” This is how the contributions of the speakers on the podium can be summed up.

A further increase in production is said to be nearly impossible. The statements about this: Production depends on the raw material (“You can turn up the forest as you like.”). In conclusion, it was emphasized that the timber industry “wants to supply the timber construction companies with wood as best as it can”.