For the main products, Central European timber companies expect stable and satisfactory sales in 2019. Wood processing companies do not have the prices of 2018 anymore – at the same time intermediate products, such as raw material for solid structural timber, laminations for glulam and middle layers for CLT. However, when it comes to good quality main products, domestic markets should remain stable in the coming months.
Due to the considerable quantities of damaged wood present in many regions from Northern Italy to Southern Sweden, there is pressure to find possible uses for byproducts. “Ten years ago, we learned to live with fewer exports to Italy. Now, we are preparing to live almost without sales in the Levant region.” This is a frequent answer when you ask Austrian export managers about how business is going in the region. Despite this pessimistic statement, Austrian exports rose to 140,000 m³ within two months. German exports reached only about 30,000 m³.
German companies in particular have recently succeeded in using giant markets as “relief” for lower quality products. India has been firmly in German hands for a while, and now history seems to repeat itself on the Chinese timber market.
In China, German products are offered at extremely low prices. As with byproducts, the motto seems to be “Close your eyes and hope for the best.” Normal planed byproducts are sold for 130 to 140 US-$, saw falling for 180 US-$. “China has the possibility to buy enormous quantities. In the end, however, it always depends on the price”, analyzes one market participant.
Pakistan is also buying large quantities from Europe. There are parallels to China: The country has a demand for either high quality products or “complete junk” with not much in the middle.
The USA are a giant, albeit less lucrative, market this year as well. Practically all European exporting countries have seen massive increases in exports over the Atlantic, e.g. Germany (+84%), Sweden (+21%), Austria (+20%) and Finland (+8%) (see article “More and more sawn timber to overseas markets”).
The splitting up of these assortments is not allowed according to North American trade practices. This would be very helpful right now, because the legitimate cutting of large logs always results in a lot of byproducts. However, a few suppliers to the US faced expensive consequences for misbehavior in recent years.
Europe’s key overseas markets are thus not saturated yet – maybe with the “small” exception of the Levant region. Nonetheless, the offer is sometimes too much for these markets and this can result in a drop in prices, as is the case in China.
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