It has to be said, though, that the situation differs widely depending on the product. When it comes to sawn timber, prices in the US have seen the most marked decrease, falling by 22% or lately 64 €/m³ compared to last year. This, however, hurts Central European sawmills less than the fall of sideboard prices in Italy. Lately, sideboards only cost between 139 and 148 €/m³ (free border) and thus 3 €/m³ less than in December.
At the moment, all dimensions for pallets are sufficiently available. This is the result of the high production output north of the Brenner Pass. At the same time, the Italian packaging industry seems to working at a lower capacity than usual which results in pressure on prices from both sides, i.e. supply as well as demand. Especially with fresh sideboards, market participants report “significant price differences between manufacturers, but also between the various dimensions”. Thus, the market is still searching for its price level.
Compared to last year, the outlook for the German packaging market is slightly pessimistic. The car industry is stuttering which usually is a reliable indicator for a weakening economy.
In Germany and Austria, the mixed price of solid structural wood (KVH) decreased by 4% compared to December 2018. This negative development was caused by the same factors which caused a decline with packaging materials or non-visible quality laminations for glulam: The high supply in raw materials is reflected in the price of the end product.
Relatively stable, on the other hand, were prices of higher qualities. Fresh visible quality laminations for glulam cost between 201 and 2017 €/m³ in January. Prices have thus been stable compared to December and decreased by only 5% compared to the maximum price of 2018. In comparison to the summer price of 2018, they fell by 12 €/m³.
As with glulam, prices have been more or less on the level of December, ranging from 395 to 405 €/m³ (-2% compared to January 2018) in Italy and from 408 to 425 €/m³ (-4% compared to January 2018) in Germany.
Glulam manufacturers have a rather positive outlook on future sales. In Germany, high construction permit numbers ensure construction orders at least in 2019. Orders which still have to be processed, in the prefabricated house sector for example, are an indicator for this. At the moment, German timber trade is thus supposed to buy in-stock products.
In Italy, however, glulam demand probably declined by another 5% in 2018. Manufacturers don’t expect a further fall in demand in 2019. Despite stagnating numbers of new buildings, the trend towards wooden buildings facilitates a certain growth. Demand should therefore remain stable.
What remains is to remember the uncertain economic developments on overseas markets or in short: Sales are going to be slightly more challenging in 2019.
With an average of 111.5% in 2018, the sales indicator reached its highest level since its introduction in 2006.
The second best year in the last 13 years was 2017 when the sales indicator was on average at 108.8%. The balance sheets of 2017 reflect the good performance of Central European timber companies in that year.
A level similar to that of 2017 was reached only in 2013 and 2014. At the time, companies were not able to profit from favourable market conditions, because log wood prices were relatively high and supply was scarce.
The most negative values since the beginning of records were by far the years 2008 and 2009 when the indicator was barely above the 90%-mark. This is in line with the purpose of the sales indicator: 100% represent a normal year, 90% a negative one.
Vice versa, the value of 111.5% reached in 2018 indicates a very positive year. One can thus look forward to the company results of 2018.
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