Sawlog prices have trended downward in most European countries in both US dollars terms and in the local currencies over the past two years.
The European Sawlog Price Index (ESPI), which represents nine major softwood sawlog markets in Europe, did not change much quarter-over-quarter and was Euro 82.33/m3 in the 1Q 2016, according to the latest issue of the Wood Resource Quarterly (WRQ).
However, before this last quarter, the ESPI had been in steady decline for two years and in the 1Q of this year was 9% below the 1Q 2014 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, and in the 1Q 2016 they reached their lowest level since the 2Q 2010 (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 2014. 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.
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 2016 than in the same quarter last year.