The Random Length is currently at 1,160 USD/bft – that’s around 580,-€/m³ for an equalized structural timber in American standard dimensions of 2/4 2/8 inches. It also remains exciting to see how the China-Russia axis will continue to function or whether China will purchase even more on the European market.
Large volumes in the first two months from suppliers Sonae Arauco, Swiss Krono and Norbord. Market leader Kronospan has tended to hold back on production and curbed mills in output. Therefore, the apparent shortage across the entire market is rather artificial. Due to the price increases announced as a result, demand has been fueled, resulting in a shift of stock from industry to trade and crafts. Due to the increase in the cost of wood, energy and transport, there are already further price increases. It will be crucial that the price spiral does not get out of hand. At the moment, no real shortage can be expected. However, due to the Ukraine war and the associated plant shutdowns in the affected areas, there could be changes in the flow of goods, which will then also affect the Central European market. In addition, many chemicals required for production are sourced from Russia and are now partly eliminated.
At the moment, supply is regulated, and demand from the trades is also holding back. However, this could be the calm before the storm. Enormous capacities in Ukraine and Belarus are currently not available. Volumes that would otherwise flow to production facilities in Poland and Hungary have to be covered by other plants. In addition, with the shutdown of IKEA’s operations in Russia, their Swedspan production will also be down, as well as furniture production. This will also have an impact on availability. Therefore, price increases and shortages of goods must be assumed today.
The MDF sector continues to be in short supply, but sufficient quantities can be procured at a high price level. For the time being: due to the effects of the war in Ukraine, as described for particleboard, the shortage will worsen. Clear recommendation: Supply yourself with sufficient goods now.
Due to the extreme Russian market share, the supply of birch plywood is already in no way guaranteed. It is probably still possible to order quantities in Russia, but delivery is not certain. Kilometers of traffic jams in front of the borders and the lack of return transports create considerable challenges. In addition, it seems to be a matter of time before the import of goods is made impossible by import restrictions. European production cannot in any way compensate for the Russian birch plywood volume. On the contrary, there are already complaints about the lack of raw wood reserves. Alternatives are therefore virtually unavailable. The recommendation here is to increase the stock of beech plywood now and to sell the birch plywood only at a reasonable margin and in reasonable quantities. The price of birch plywood will increase significantly, and other plywoods will also be out of stock in the short term.
Sawn timber / planed timber
Roundwood and sawnwood
The supply of roundwood is currently only sufficient, as no relevant quantities have been accrued due to storms or beetles. Private forestry is holding back on felling volumes, as they are aiming for higher prices. Our assessment: There will be no explicit shortage of sawn timber, but it remains uncertain how the supply of preferred cross-sections will develop during the season.
Logs from Eastern Europe and Russia
Importing logs from Ukraine has become virtually impossible due to the war. The mills in Poland and the Czech Republic can therefore currently not be supplied without disruptions. Supply chains have been interrupted, and Ukrainian employees (between 18 and 60 years of age) have been forced to perform military service in defense of their country. All in all, this is clearly leading to a shortage of lumber for the processing industry – also in Germany. In addition, due to the links of the forestry sector in Russia and Belarus to the armed conflict in Ukraine, FSC now also prohibits the trade of FSC-certified material or controlled wood from both countries.
Logs from Scandinavia
There is a drastic shift from Russia to Scandinavia. The BSH industry and planing mills must prepare for significant price increases.
Source: HolzLand GmbH / Newsletter vom 14.03.2022