Sawlog costs, which often account for more than two-thirds of the production costs, have fallen substantially in Central Europe in 2019 making the sawmilling sector in the region more competitive. The European Sawlog Price Index in the 3Q/19 was 35% lower than its record high in 2011.
Seattle, USA. A plentiful supply of logs coupled with declining demand moved sawlog prices downward in most major markets around the world in the 3Q/19, according to the Wood Resource Quarterly. The biggest price reduction came in Central Europe, where storm-damaged logs flooded the market. In Germany, sawlogs prices fell 16% q-o-q to a level not seen in 17 years. There was also good news for sawmills in neighboring Austria and the Czech Republic, where log prices plummeted 14% and 18% respectively over the past year to reach their lowest prices since 2003. Latin America was the only continent which did not see price declination of domestic sawlogs in the 3Q/19, with log costs remaining practically unchanged from the previous quarter.
With falling sawlog prices throughout the world, the Global Sawlog Price Index (GSPI) took a hit in the 3Q/19 and had its third largest q-o-q decline in ten years. The GSPI was down by 4.3% from the 2Q/19, and 9.0% below its 3Q/18 level. From the 2Q/19, prices fell the most in Coastal British Columbia, Germany, Estonia and the Czech Republic.
The European Sawlog Price Index (ESPI), which has been in steady decline for two years, fell 5.0% in the 2Q/19, reaching its lowest level since 2005 (in US dollars) in the 3Q/19. As the result of sharply reduced sawlog prices in Europe, both in US dollars and Euro terms, the ESPI Index has fallen faster than the GSPI the past two years (see chart). In the 3Q/19, the ESPI Index was 35% lower than at its record high in the 2Q/11. Lower costs for logs have made sawmills in Central and Northern Europe more competitive, which has resulted in increased lumber exports in the second half of 2019.
Wood Resource Quarterly (WRQ). This 56-page report, established in 1988 and with subscribers in over 30 countries, tracks prices for sawlog, pulpwood, lumber & pellets worldwide. The WRQ also reports on trade and wood market developments in most key regions around the world. For more insights on the latest international forest product market trends, please go to www.WoodPrices.com
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