After log wood had become scarce at a regional level starting in September, there was a noticeable relief on the lumber market. December was another month marked by rising prices. As a result of this development, the sales indicator rose by 1.8 percentage points to 123.3% in December.
Higher prices to be expected
For the Central European timber industry, the year 2023 ended with a sales indicator value that was around 15 percentage points lower than it had been at the end of 2022. There are signs that indicate further price increases at the beginning of 2024. Since mid-December, the updated price lists of numerous manufacturers are available, and they show partly marked increases for shipments in January. Export trade businesses and smaller sawmills are nevertheless criticizing some bigger suppliers for not seizing all market opportunities at the beginning of the year.
In southern Germany and Austria, private forest owners were still hesitant about harvesting wood in December. Temperatures above zero made work in the forests difficult. At a local level, several forest owners were busy removing trees which had been damaged by the snow or strong winds.
Three-digit log prices (almost) a reality
The price of €100/m³ set by forest owners was achieved in December. In Baden-Württemberg, Bavaria and Austria, prices for spruce/fir log wood ranged from €89 to €103/m³, and in some cases even exceeded this span. In January, prices are likely to rise by another €5/m³. For shipments in January, prices of at least €105 to €110/m³ were reported.
Sawmills are warning against making the same mistakes as at the beginning of 2023 when log wood was purchased at prices which could not be charged for lumber in the second quarter.
Too little, too late – that’s how the large sawmills reacted in 2023 when it came to curtailing production. The same is true for the price increases for 2024: They’re too hesitant.
Scandinavian suppliers with problems in Central Europe
The curtailment of cutting implemented in previous months resulted in an increase of prices of lumber products in December. Traditionally, the Holzkurier analyzes three products. Of those three products, only laminations for glulam remained stable at the level recorded in 2022, i.e. at €220 to €230/m³ (visible quality, fresh, in bulk, Germany). Demand for visible-quality laminations is particularly high. Scandinavian suppliers are struggling with the current price level in Germany. Compared to the Central European competition, Swedish and Finnish sawmills faced bigger problems related to higher log prices and the supply of log wood. Nordic log wood has become more expensive and scarcer, which could impact markets in 2024 as well.
In Italy, the sideboard price keeps rising – not so much because of stronger demand but rather due to limited supply. In December, the price of machined 17-mm sideboards rose on average by €4/m³ to a span of €162 to €182/m³ (free border), and thus remains €50/m³ below the price level recorded at the turn of the year 2022/2023. For January, further price increases have been announced. In the case of lumber, strong demand from the MENA region is also driving prices. An equally high demand is predicted for the US market early this year. Given this tailwind, price increases are to be expected in Central Europe and Italy in 2024.
Meanwhile, no upward trend can be observed when it comes to pellets. In Germany, the price fell by 5% compared to November, to €329/t in December 2023. Year on year, the pellet price halved.
