German timber prices hardly changed in May. Despite a difficult sales situation for both construction timber and exports. In any case, sales in the sawmill industry have shrunk significantly. This scenario will also determine the further development of timber prices.

The sawmill industry continues to be well stocked with round sawn timber. Relatively high stock levels were also reported in May. At the same time, demand is relatively restrained both on the domestic market and in exports.

In the first quarter of 2024, turnover in the German sawmill industry fell by 17% to €1.3 billion compared to the same period in the previous year, reports the industry portal Holzmarktinfo. Domestic sales fell by 20% to 723 million euros.

Nevertheless, softwood prices remained relatively stable in most regions. This is also confirmed by the price reports from the Federal Statistical Office for spruce and pine wood (see chart). Depending on the region, between 90 and 105 euros per cubic metre (fm) were paid for the leading assortment of spruce A/C 2b+ in May. On average, the price is likely to be around 100 euros per cubic metre net.

At the same time, spruce prices are around 10 % lower than a year ago, according to data from the Federal Statistical Office. However, the prices for beetle and D-wood have often been reduced, according to forest owners' associations. Depending on the buyer, discounts of 30 to 35 euros per cubic metre are reported.

Due to the persistent rainfall in many places and poor trafficability, forest stocks are very high in a number of regions, according to reports. In addition, due to the numerous public holidays in May, the delivery times at the sawmills are restricted in some cases, which means that timber cannot be removed and marketed as planned.

Slump in timber sales on the domestic market and in exports

The business situation for German softwood sawmills improved slightly in May, reports the industry portal Holzmarktinfo. Sawmills consider their current situation to be adequate. In addition, expectations for the next three months were less pessimistic than before.

However, exports fell significantly in the first quarter, which clearly restricts sales opportunities. At 1.4 million m³, exports of sawn softwood (rough timber) in the first three months of 2024 were around 9% lower than a year ago.

Exports of softwood logs even fell by 36 % to 1.1 million cubic metres compared to the same period in the previous year. At 470,000 cubic metres, German exports of coniferous industrial timber shrank by 23 % compared to the same period in the previous year.

However, weak sales of construction timber on the domestic market are likely to be one of the biggest problems on the timber market: In the first quarter of 2024, the construction of a total of around 53,500 homes was approved in Germany. Compared to the same period of the previous year, this represents a decline of 22%; compared to the first quarter of 2022, the decline is almost 40%.

Spruce prices are currently around 10 per cent lower than a year ago, according to data from the Federal Statistic


Hardwood market also under pressure

Hardwood sawmillers are also relatively critical of the market outlook. The business climate there cooled noticeably in May 2024, reports Holzmarktinfo. The positive expectations of the previous month have given way to clear pessimism.

Many forest owners also point out that the slightly cooler weather in recent weeks has only slowed down the development of the bark beetle. Therefore, material suitable for breeding should be processed and removed as quickly as possible. However, this is often difficult due to persistent rainfall and poor accessibility.

With the rising temperatures, the spruce bark beetle is flying again. For this reason, it is very important to monitor spruce stands in order to recognise the infestation as early as possible, say forest owners' associations.

According to data from the Federal Statistical Office, prices for beechwood were recently around 13% lower than in the previous year.


　

Source: agrarheute.com