MARKETS
Uncertain present but positive future TIMBER AUCTIONS MARKET REPORT
Oliver Combe Timber Auctions
Global factors The major influence on the UK market remains beetle damaged spruce timber from Central Europe and Scandinavia which is causing an oversupply of spruce timber on the global market. Whilst elsewhere in the world timber prices have stopped falling and there are signs of modest increase in prices, the situation in Western Europe is one of oversupply. The scale of the sanitation felling’s to try and recover timber damaged by the Ips typographus outbreaks in central Europe is huge. Hardest hit has been the Czech Republic and Germany although there also outbreaks in Austria, France, Slovakia, Poland and Sweden. In 2018, the Czech Republic reported 18 million m3 obs of damaged timber to be felled, this year it has reported 30 million! The total standing resource is 384 million m3 so felling is substantially outstripping growth.
In Germany, the situation is equally dire with 11 million m3 of beetle timber harvested this year, which is a 50% increase on last year although the standing volume of spruce in nearly one billion m3. The fragmented nature of German forest ownership has also meant that many damaged stands have been abandoned as smaller owners are unwilling or unable to stand the cost of felling and restocking so choose to close the gate and let nature run its course. Throughout Europe, there has been a massive and concerted harvesting effort to clear damaged spruce and supply it to industrial wood uses. This has created a massive oversupply of spruce saw logs at regional sawmills leading to substantial price reductions. Roundwood prices have crashed to the point where in some areas beetle damaged timber is worth less than the cost of harvesting it. Production curtailments are now the norm in most North European and Scandinavian mills for the next six months and predictions are of falling log prices as we move into 2020. The price crash has forced log sellers to look for alternative markets, although the high harvesting costs and long transport distances have made this challenging. Many countries are also wary of importing beetle damaged timber so the sellers have had to
Roadside hardwood prices (£ hft) November 2019 Oak planking
Oak beam
Oak fencing
Oak Cordwood
Export ash & beech
White ash sawlogs
Export 1st grade sycamore firewood
High price
£15.00
£10.00
£6.00
£1.40
£3.25
£4.50
£5.00
Mid price
£12.00
£8.00
£4.50
£1.25
£2.75
£4.00
£4.00
Low price
£9.00
£7.00
£3.50
£1.00
£2.00
£3.00
£3.00
These prices are for guidance purposes only and are based on historic market information
continue to cast their nets further afield. In this case, all roads lead to China and there has been a massive increase in the shipments of beetle damaged spruce logs to China from central Europe. Exports to China have increase by around 400%. The Chinese market has been saturated with both roundwood from Europe and sawn timber at the same time as domestic demand has fallen as tighter environmental controls being to have an impact, to the point where prices have been steadily falling in 2019. However, the recent weeks have seen a pronounced upturn in demand for softwood logs in China and there are already signs that The US softwood market is showing signs of starting to improve with prices now at around the $400 mbf (million board feet) for 4x2 Kiln dried material, which is a 7% increase on the previous month. However, this is on the back of much reduced production levels from the sawmilling sector. There are now signs of an improvement in US housebuilding starts which may now begin to lead to increase in both price and demand levels
£ per tonne delivered to customers in Wales, central and south England (Nov 2019)
£ per tonne delivered to customers in north England and Scotland (Nov 2019)
Product
Lower price
Upper price
Trend
Product
Lower price
Upper price
Trend
Log 18
£60.00
£75.00
=
Log 18
£60.00
£75.00
=
Bar 14
£55.00
£60.00
=
Bar / pallet 14
£55.00
£65.00
=
SRW
£45.00
£55.00
=
SRW
£40.00
£55.00
=
Fencing
£55.00
£65.00
Fencing
£55.00
£65.00
H Wood firewood
£50.00
£60.00
= =
H Wood firewood
£45.00
£55.00
= =
40 FORESTRY & TIMBER NEWS • December 2019
CONFOR.ORG.UK
