When it comes to lumber and processed wood products, the past three-month period was a “quarter horribilis”. The lumber price has been falling for eight consecutive months, recording an overall decrease of €170/m³ since April. Sawmills likely earned (good) money in the first three quarters. In the fourth quarter, however, they were in the red. Recently, there have been substantial curtailments of production.
In Italy, sideboards only cost between €190 and €210/m³ (free border, in bulk) in the month of December, which is the lowest price range since February 2021. The situation is similar when it comes to fresh laminations for glulam. In Germany, their prices range from €202 to €214/m³ in December, marking a return to levels last recorded in October 2020. Despite these very low prices, some Scandinavian companies offered dry laminations for glulam at an even cheaper prices than their Central European competitors.
Monthly increases of €20 to €30/m³
Recently, monthly price increases of €20 to €30/m³ for lumber have been announced for the period January to March. Some market participants are even of the opinion that prices will rise by €100/m³ until the end of February.
Everyone should have learned their lessons from the market dynamics in the first half of 2021 and 2022. Therefore, it seems rather unlikely that there will be “panic buying” in 2023.
Starting the year from a lower level
Even if these expected price increases will become a reality, the Central European timber industry will start from a much lower level than it did the year before. This, however, does not apply to sawmill by-products and pellets – despite the recent massive price corrections. In general, it is quite safe to say that profits generated with sawmill by-products and pellets will no longer outweigh losses incurred in lumber sales.
In the short term, sawdust might even become a problematic product if demand from pellet producers remains as low as it is at the moment.
