At the meeting of timber exporters in Klagenfurt on March 24, one participant had “suicidal thoughts” due to the current situation – for example because of a “net-net price of €230/m³ for a typical German sawmill, which has logs for around €140/m³ in its log yard”.
However, the oversupply is expected to clear up soon, among other things “because Europeans have significantly reduced their deliveries recently”. As for the months of April, May and June, the timber exporters expect rather strong demand at reasonable prices. An increase of €50 to €60/m³ for 2-by-4 lumber is imaginable in the next four to six weeks.
Boards and products other than mass-produced 2-by-4 are said to fetch better prices already. What does help to reduce pressure, though, is the cost of transport. “Shipment in containers is already paying off and will fall below US-$50/m³,” some exporters reported.
UK a good market for Scandinavians despite Brexit
Even Great Britain “will be a good market for Central European goods again in eight weeks’ time”. Business on the island is already going well for the Scandinavians. Recently, they raised their prices by another €30 to €40/m³.
“Scandinavian companies are under less pressure than the Central Europeans ones. Their production output decreased by 1% in 2022. In December, loading activity was unprecedented. As a result, their stock levels are low at the moment. It almost seems as if they could hardly satisfy demand,” was the assessment given by one participant.
This year will probably see a decrease in log harvesting activity in Sweden. The Swedish State Forests Sveaskog will reduce felling and concentrate on wood with bigger diameters.
The log price has increased already. “I assume that the price is over €100/m³ ex sawmill in the south. However, you have to subtract 20% from that price because the calculation is based on the top diameter. Nevertheless, you also pay €90/m³ in the north – based on the same way of measuring that is used in Central Europe, too,” one timber exporter told the other participants in Klagenfurt on March 24.
Over 300 Euros
In line with this prediction, the group expects that the Swedish price expectations could be implemented in Central Europe in the second quarter. The goal is €300 or more.
