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Timber Exchange review – October 2019
2019 11 20
115 buyers from Lithuania, Latvia and Poland took part in the ETTS auctions in October
By the end of October, the quantity of sold timber recorded with the Electronic Timber Trading System (ETTS) amounted to 165 solid m³. A total of 149 auctions was organised in October, of which 92 auctions were announced as completed. This was a 23% increase compared to September. One hundred fifteen buyers from Lithuania, Latvia and Poland took part in the auctions. Ninety-seven per cent of timber was purchased by Lithuanian companies. The total value of the sold timber amounted to EUR 1,354,628.
In October, most of the timber sales via the ETTS took place during the repeat auction of the second half of 2019 (26,569 solid m³). Supply mostly consisted of cheaper timber assortments. Most of the sales accounted for wood panels (7,700 solid m³), timber harvesting residues (7,352 solid m³), firewood (5,815 solid m³) and pulpwood (4,600 solid m³). The supply of these assortments on the European market has increased due to the more frequent heat waves and the bark beetles that attacked the forests.
During the short-term auctions held in October, 55,596 solid m³ of timber was sold. The sales volumes doubled compared to September. The increase was mostly due to the 4.5 times increase in the supply of firewood – 26,865 solid m³ of this were sold.
Trade in TOP5 timber assortments in October accounted for 83% of the total sales of timber, i.e. 45,955 solid m³. The short-term transaction portfolio included 58% of wood panels and firewood (class II and III calorific value), 18% of pulpwood, 12% of packing logs, 11% of sawlogs and 1% of timber harvesting residues.
In October, the prices of TOP5 assortments decreased compared to the prices recorded in September. The price decrease was 13.3% for pulpwood, 12.5% for packing logs, 10.3% for wood panels and firewood (class II and III calorific value), 7% for timber harvesting residues and 6% for sawlogs.
The situation at short-term auctions in November is likely to remain similar to that in October, and a high supply of firewood is expected. The first half-year auction of 2020 is scheduled on 15–20 November, at which 892,410 solid m³ of timber will be offered. More than 200 participants have registered for the auction and active trading is therefore expected.
As bark beetles continue to attack forests, low timber prices are recorded in Europe
The September 2019 data on actual timber sales in the Baltic countries shows a price drop in the region. The greatest decrease was recorded in Latvia: over Q3 2019, the prices of all assortments dropped by 8 to 21% and reached the price levels in Estonia and Lithuania.
The Swedish Forest Agency has informed about the price decrease in Q3 2019 for the second consecutive quarter.
The Swedish Forest Agency has also published updated information about bark beetle attacks and notified about the nearly doubled damage compared to the same period last year (7 million solid m³), which is an equivalent of timber worth nearly 3 billion SEK.
The Swedish Forest Agency, in cooperation with representatives of the timber industry and county administrations, has been implementing an initiative to stop the bark beetle attacks for more than one year now. The Agency is also seeking to inform the general public and raise awareness of the problem and combat it using different measures. New digital tools featuring maps and artificial intelligence able to forecast future bark beetle attack risks are also employed.
The situation on the markets shows that the problems encountered in forests have not been eliminated, and the prices recorded in Q4 2019 are likely to persist.