In September, the sales indicator made the second biggest monthly jump ever recorded: +5 percentage points to 107.0%. This increase compensated for all decreases in prices which were recorded over... Read more ...
A sellers’ market for good
In the third quarter, the construction segment of the softwood sawn timber market has become a sellers’ market for good. Whether it is solid structural timber, glulam, CLT or solid wood panels: What counts primarily is the confirmation that the goods will be delivered. The price is secondary.
Accordingly, prices of all sawn timber assortments, on which Holzkurier does surveys, saw increases. Rough sawn timber prices in Italy rose by 4 €/m³ compared to July, while sideboards were up by 3 €/m³ which is the first increase in prices since February 2018 or in 30 months. However, all assortments are still well below last year’s price levels.
Price rises in the last quarter?
Instead of a weakening demand in the fourth quarter, nearly all interviewees now expect business to remain brisk. As a result, the feared decreases in prices are becoming increases. What helps with this are announcements by Scandinavian timber companies about double-digit price rises in euros for the fourth quarter.
As with glulam, prices increased in Italy (+7 €/m³) as well as in Germany (+4 €/m³) in the month of August. In both countries, they are now exactly on last year’s levels again. Glulam producers started to further raise prices which is unusual for this season. Depending on the assortment, producers would like to charge 10 to 15 €/m³ more for visible quality glulam in Germany and Italy. Stock levels are reportedly quite low at the moment, despite a very high production output in June, July and August.
The point in time at which the expected slowdown in the economy is going to set in seems to be further and further in the future. One interviewee boldly predicts: “We need some calming in the first quarter of 2021 in order to be able to raise our stock levels.” The number of building permits in Germany and the order books of the prefabricated house sector, which are known to be nearly full until well into 2021, contribute to the optimism.
Completely detached US market
Softwood sawn timber prices in the US have reached their own spheres. Nearly detached from the development of demand, prices are skyrocketing. In the first three weeks of August, the following increases were recorded: +25 €/m³, +44 €/m³ and +56 €/m³. This brought the 2-by-4 price to around 460 €/m³ free US East in week 34.
These prices attract enormous volumes from Europe to the US. In the first half-year, shipments from Germany rose by another 50% to 778,000 m³, while Swedish and Austrian exports grew by 20%, bringing the total to 450,000 m³ and 90,000 m³, respectively. All of these shipments reduce the pressure on markets where sales are not going so well, as is currently the case with the Levant region in particular.
India, China and …
Depending on the current price level, there are alternative markets for export-oriented sawmills in the whole world. Sawmills which mostly cut damaged wood are more competitive than ever before.
This year, the domestic market in Central Europe is the most stable for the majority of sawmills. This is true for sawn timber but also for glued products. Delivery times for glulam are longer than they have been in a long while. Glulam producers are preparing for a more short-term order behavior once new productions have been started up. As with CLT, the order situation recovered during summer.