Timber Exchange trade statistics September of 2022

• In September, State Forest Enterprise (SFE) announced 100 auctions. They offered a total of 40.26 thousand. m³ of timber products. Compared to August, the amount of timber offered decreased by 27%, and the share of timber sold decreased by 9%. Auctions were organized by 26 SFE units.
• The timber SPOT index recorded an index value of 81.48 Eur/ solid m³. Comparing the value of the index with the corresponding period last year, a growth of 38% is visible. Compared to August, the index did not change significantly.
• No significant price changes were recorded in September. The price of sawn logs (class D) fell by 2%, from 89.56 EUR/ktm to 88.01 EUR/ktm.

Baltpool Timber Price (SPOT) Index

Global timber market

The situation in the US timber market is quite different from that in Europe – across the Atlantic, timber prices are falling. The continued decline in timber prices has been largely driven by a slowing housing market, which has been heavily impacted by the US Federal Reserve’s (FED) rapid and aggressive rate hikes.

Just a week after the FED raised interest rates by another 75 basis points, the average 30-year fixed rate is close to 7%. The popular 30-year fixed rate hit 6.87%, a big jump from a year ago when the average rate was just over 3%, according to the “Mortgage News Daily Rate” Index.

Home developers such as “Lennar” and “KB Home” are already pulling away from residential land deals due to the deteriorating outlook for the housing market. In the latest quarter, “Lennar” said it canceled 10,000 lot purchase contracts, while “KB Homes” gave up 8,800 lots.

In Europe, the start of the heating season is here and residents are preparing for winter: with rising gas and electricity prices, many households in Europe are turning to firewood as an alternative or backup heat source this winter. Currently, there is a shortage of firewood in various European countries, which is why the prices of these assortments are rising. Firewood prices in countries such as Germany and Belgium have increased by about 2.5 times. From 2022 July the European Union ban on the import of Russian wood pellets for energy production came into effect and had negative consequences throughout the supply chain.

In Germany, firewood, wood pellets rose in price by 86% last month compared to the same period a year ago. The almost doubling of firewood prices in Bulgaria has led to the recent decision to end wood exports to non-European Union countries. In Poland, a radio station suggested that it might now be cheaper to chop up old furniture and burn it than to buy firewood. Even in Switzerland, where the inflation rate was relatively low (9.8% in August according to The Organisation for Economic Co-operation and Development data), price of firewood rose by around 26% last month.

Further price dynamics throughout Europe will be determined by the type of winter that is approaching – if it is historically cold, the prices of not only firewood, but also other types of timber may experience further jumps.

Trade in TOP timber assortments in ETTS short-term auctions

Trade in TOP assortments in ETTS short-term auctions

Trade in regional units of the State Forest Enterprise in short-term auctions

Timber assortments sold at ETTS short-term auctions

Abbreviations:

KA – felling residues; KAD – covered felling residues; KAK – felling residues at cleared space; KL – hard leafy short timber; ML – firewood; PM – panel timber; PJ – sawn logs; PP – pulpwood; TR – packing logs; St – large-sized timber, small-end diameter ≥32 cm; Vd – medium-sized timber, small-end diameter 20-31 cm; Sm – small-sized timber, small-end diameter ≤19 cm; L1 – assortment length class, ≤2.9 m; L2 – assortment length class, 3.0 – 3.9 m; L3 – assortment length class, 4.0 – 6.0 m; L4 – assortment length class, 6.1 – 8.9 m.