However, before this
last quarter, the ESPI had been in steady decline for two years and in the
first quarter of this year was nine percent below the 1Q/14 level. The biggest
price declines since 2014, in Euro terms, have occurred in Austria, Germany and
the Czech Republic. Softwood sawlog prices in both Austria and Germany have
been falling since early 2014, but in the 1Q/16 they reached their lowest level
since the 2Q/10 (in Euro terms).
In US dollar terms, the price decline has been
more dramatic with current prices in the two countries being almost 30% below
the average prices in the 1Q/14. Despite the substantial price reductions as of
late, sawmills in Austria and Germany still have higher wood costs than lumber
producers in the Nordic countries and in Eastern Europe. The high costs for
domestically sourced sawlogs have driven sawmills in both countries to increasingly
source wood raw-material from neighbouring countries where log prices are
lower. Germany and Austria are currently the second and third largest importers
of softwood logs in the world and particularly Germany has increased
importation substantially over the past five years.
In 2008, Germany was actually a net log exporter of about 1.6 million m3 but the flow of logs has since turned around and the country was a net log importer of 5.4 million m3 in 2015, reports the WRQ (woodprices.com). The major log supplying countries in 2015 and early 2016 have been the Czech Republic, Poland, Norway and Estonia. The average import price for spruce sawlogs has declined the past year and was about 10% lower in the 1Q/16 than in the same quarter last year.