Panels & Furniture Asia September/October 2020

18 | NEWS
September / October 2020, Issue 5 | Panels & Furniture Asia
GERMAN LOG EXPORTS REMAIN HIGH IN EARLY
2020; ALMOST 50% DESTINED FOR CHINA
WOOD RESOURCES INTERNATIONAL
reports that the log market in Germany
has been extremely volatile in the first
half of 2020, with high demand from
the export market and a tight supply of
fresh green logs. When COVID-19 forced
sawmills to close in March, domestic
demand for sawlogs fell and the price
increases seen earlier in the quarter
reversed – resulting in both domestic and
export prices falling.
Sawlog prices varied throughout the
country depending on the level of local
supply, the quality of the beetle-killed
timber, the availability of fresh logs, and
the competition from log exporters. Log
prices also varied due to contract volumes
and spot purchases. Towards the end of
the quarter, spot prices fell to levels that
barely covered the costs for logging
and hauling the timber. The 1Q/20’s
estimated average sawlog price was
an increase from the previous quarter
but substantially lower than the 1Q/19,
according to Wood Resource Quarterly.
Softwood log exports from Germany have
increased dramatically over the past five
years, from 2.1 million cubic metres in
2014 to 7.4 million cubic metres in 2019.
The oversupply of logs resulted in record
high exports in the 3Q/19 followed by two
quarters of q-o-q declines (see chart).
Despite the reduction in exports during
the winter months, total shipments
during the first four months of 2020
were up 38% as compared to the same
period in 2019.
China has quickly become the largest
market for German logs, accounting
for almost 50% of all exported logs so
far in 2020. From January to April this
year, almost 2.4 million cubic metres of
softwood logs were shipped to China.
Log exportation from Europe to Asia is a
recent trend. As late as 2017, there were
practically no shipments of German logs
outside of Europe.
Log export prices were fairly stable
during most of 2019 but started to
decline in late 2019 and early 2020. In
March and April 2020, average prices
were down about 14% as compared to
the same months in 2019. Prices for logs
destined for China have also declined
substantially from early 2019 but are still
nominally higher than the prices for logs
shipped to other markets.
The large supply of logs in Germany has
had little impact on the consumption of
logs by the domestic sawmilling industry.
The increase in lumber exports has been
less dramatic than that of logs, with the
y-o-y rate of change actually falling the
past three years, from 12% (2015 to
2016) to 6% (2018 to 2019). P
Source: Wood Resources International LLC