In April, the sales indicator reached 203.8%. This corresponds to an increase of 13.4 percentage points compared to March and of 39 percentage points in comparison with April 2021.
Record prices due to the rising cost of energy
In April, prices of products which are all directly or indirectly linked to the cost of energy have reached record levels as well. Pellets never cost more in Germany (€377.2/t) and Austria (€322.9/t) than last month. Influenced by this development, prices of sawmill by-products also continued their upward trend. Ranging from €13.5 to €14.8/st in Austria, sawdust has reached the highest price level since 2006 when the Holzkurier’s surveys began. The situation is similar when it comes wood chips which cost between €15.5 and €17.4/st and are at a level which they had last been at in the fourth quarter of 2013.
As for lumber and processed wood products, prices seem to have peaked. From mid-December to shortly before Easter, demand was very strong and prices have been rising at the same pace. After Easter, the market was finally saturated – something that was expected to happen sooner or later.
Markets partly saturated
It is not yet possible to predict whether prices will remain constant or whether they will fall. Delivery times of manufacturers have shortened and processing companies are slower at using the quantities they ordered, both of which are unmistakable signs of a certain saturation. Normal demand seems to be satisfied in most sectors and segments and now, companies are hesitant when it comes to purchasing.
Even sideboards, which were in particularly strong demand as a result of disruptions to Russian/Ukrainian deliveries, passed the price peak in April. With prices ranging from €325 to €360/m³ (free border) last month, Holzkurier identified a decrease of €7/m³. The Italian packaging sector is struggling with a severe lack of nails which is negatively affecting demand.
Prices of both main products, which are taken into consideration for the sales indicator, continued to rise in April. In many cases, however, they did not meet the expectations of sawmills. According to the Holzkurier’s survey, laminations for glulam cost €390 to €420/m³ in April, passing the €400 mark on average nevertheless.
Shorter delivery times
As for glue-laminated timber, delivery times vary greatly from manufacturer to manufacturer, with times of ten days to six weeks being reported. The strong growth in demand since mid-December not only led to a record January for the industry. “I attribute the high demand in the first quarter to companies anticipating orders for May and June. That’s why it’s suddenly so quiet now. Everyone has stocked up and the purchased goods have to be used first,” one glulam manufacturer explains. Visible quality glulam costs between €690 and €720/m³ in Italy and between €700 and €730/m³ in Germany. This is 20% or €120/m³ more compared to April 2021.
Neither all-time high or low prices expected for glulam
All market participants who were interviewed no longer expect glulam prices to reach close to €900/m³ again this year. Prices will hardly rise any more. The question is rather whether they will remain stable at the April level or whether there will be decreases. The high price of laminations should prevent another sharp drop to around €500/m³, as was the case in the fourth quarter of 2021. Glulam manufacturers who buy specific products will likely have a stabilizing effect.
In the US, softwood lumber has seen a massive price correction in April. Market experts do expect prices to recover again, however, it is seen as very unlikely that they will reach a level similar to the all-time highs of 2021.
Forecast for third quarter impossible
Around 70 days after the war in Ukraine began, the repercussions on the global timber market are still impossible to assess in their entirety. It is not yet clear which factor has the bigger impact: the shortage of goods or the decrease in demand due to inflation and fears of it. As a result, it is impossible to make forecasts about developments which are over two months in the future.
Quotes from market conversations
If there is a fall in prices, construction products will be hit first. Packaging prices tend to remain constant longer.
The ambitious May prices didn’t become a reality. Now, I expect them to stabilize at the level that they reached in April.
I don’t expect a sharp drop in prices like the one in the third quarter of 2021. Stock levels are not sufficient and pressure from the log wood is simply too high for that to happen.
At least one third of the orders which came in so far were anticipated orders for May and June.
Nobody can say for sure what will happen in the third quarter.
