Sawlog prices fell throughout the world in 2019 with European prices declining the most, resulting in a more competitive sawmilling sector in Central and Northern Europe, reports the WRQ
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.
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.