© Martina Nöstler

germany / italy

Thin lumber still under pressure

Article by Gerd Ebner (translated by Eva Guzely) | 31.08.2022 - 10:39

After prices of 17-mm sideboards had been falling sharply in previous months (by €100/m³ since March), Holzkurier’s editorial team did not see a further decrease in August. Fresh sideboards currently cost €240 to €260/m³ free border, the price being only €10/m³ higher than the lowest value, which was recorded in the second half-year of 2021.

Packaging sector with fears about supply

The packaging sector was one of the first ones to worry about insufficient supply when the war in Ukraine began in March. Until July 10, important products, i.e. cuttings, arrived at Central European packaging manufacturers via other channels. However, the tightening of sanctions against Russia has put an end to this. Now, there could be a real shortfall in cuttings. As a result, they have become more expensive recently – contrary to long wood. As of now, there is still enough wood and the surcharges seem to be manageable for the packaging companies.

Over the last two years, raw wood for solid structural timber has seen extreme ups and downs when it comes to prices. The main product is still much more expensive than sideboards, but with the lowest price being just over €200/m³ in August, there was at least not a further decrease.

Manufacturers are buying again

Manufacturers of solid structural timber have started to buy moderate volumes of raw wood again, which sawmills see as a modest success. At the end of August, stock levels of timber trade companies seem to be low enough to prompt them to purchase wood again. The price of solid structural timber has stabilized at around €340/m³. It remains to be seen whether timber trade companies only stock up on the minimum or whether they hope for growing demand from the timber construction sector in autumn.

As for glue-laminated timber, prices for visible quality glulam fell slightly again and now range from €550 to €575/m³. The current price level is only €10/m³ above the all-time low of January. Thus, glulam prices could have reached the bottom as well. Two-shift operations at nearly all companies have brought about the necessary easing of the market situation for glulam manufacturers. Nonetheless, strong demand is essential for price increases – but not yet in sight.

Historic market shares in the US

In August, all overseas markets are in a phase of re-orientation. In North America, production will be drastically curtailed from September. In the west of Canada, expensive, scarce log wood is the main reason for it. In addition, US lumber purchases have been on the decrease. As for the big European exporters, even a weaker US market is more attractive than their respective domestic markets. Since the US are expected to reduce their imports by 7 to 8% this year, while shipments from Europe are to increase by 10%, Europe will secure the biggest market share of all time. 

Japan bought surprisingly big quantities so far this year, both from Europe and in particular from Russia. Now, the market seems to be saturated, though.

Time lag in the price trend

Four months after prices started falling in Europe, Japanese, Chinese and Australian customers request significant discounts as well. Expectations of customers in North Africa and the Middle East are similar.