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sales indicator october 2022

Oversupply still an issue

Article by Gerd Ebner (translated by Eva Guzely) | 02.11.2022 - 11:10

Pellet prices at the peak?

The sales indicator includes wood chips and sawdust as well as the pellet prices in Germany and Austria, i.e. four products which can be used for heating. Three of them reached historic price levels in October, while only one saw a 3% decrease. The latter is the German pellet price, which fell slightly. At €743/t, however, it is still €100/t higher than the Austrian pellet price.

The extraordinary upward trend of pellet prices, which has been ongoing since the third quarter of 2021, can be seen clearly in the ten-year comparison in the chart below. In percentage terms, pellets have “outperformed” all other wood products in October.

When it comes to wood chips (2.5-fold increase compared to October 2021) and sawdust (triplication compared to last year), the price situation is extraordinary as well.

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Source: Holzkurier price trends

Laminations for glulam nearly 30% below 2021

By now, the prices of all three lumber products, which are included in the sales indicator, are lower than those of last year. A particularly striking difference can be observed in the prices of the main products laminations for glulam (-28%) and raw planed timber (-23%). With a price range of €220 to €240/m³ (fresh, in bulk, carriage paid, Germany), the price of the former is close to that of fresh sideboards. As for machined 17-mm sideboards, the Holzkurier identified prices of €215 to €235/m³ (free Italian border).

At the moment, there is an enormous difference in Austrian and German prices of laminations for glulam. Usually, laminations are more expensive in Germany. Right now, however, prices are below the above-mentioned price range in Germany, while big Austrian companies charge significantly more.

Wherever main products are produced from A/C-quality log wood only, prices should have reached the bottom for good – in light of log prices and drying costs of €30/m³.

In Italy, there is consensus that pressure on machined sideboard prices comes from Germany as well. Selling wood packaging products has finally become a day-to-day business in Italy. Here, oversupply meets reduced demand. Several customer sectors and segments have already reduced output due to soaring energy prices. Thus, when it comes to lumber, an unusual situation has arisen: Customers’ stock levels are increasing although everyone is curtailing production.

No boom anywhere on the global market

Reduced demand seems to have become a worldwide reality. The big Asian sales markets Japan and China have high stock levels, and a similar situation is reported from Korea and Australia. European exporters are currently at an advantage there because of the weak euro. The situation is the same in North America, where Europeans have gained a 20 to 25% advantage over local manufacturers in recent months.

“Order desert” and the mirage of recovery

German manufacturers of glue-laminated timber pay less for the raw wood. However, they are complaining about an “order desert”. Smaller, seemingly effective impulses for a recovery of the market turned out to be mirages. In terms of quantities, this year is expected to be like last year but with lower sales prices.

Curtailing without downsizing

Sawmills and manufacturers of glued timber products are planning to shut down earlier before Christmas this year. Furthermore, they are trying everything they can to curtail production without having to lay off workers, out of fear of never seeing them again.

The engineered wood and paper industries do not exclude the possibility of even stricter measures. Even temporary shutdowns at the end of the year are possible. Worrying reports came from the furniture industry in mid-October. In Germany and Austria, there were a number of bankruptcies and announcements regarding short-time work. Given the current uncertainty, furniture sales are suffering.