Wood raw-material costs for many lumber producers in Europe and North America have fallen over the past year both because of increased timber harvests and reduced log demand, particularly in North America and Asia. Some of the biggest price changes in the 1H/19 have been seen in the Western US, Central Europe and New Zealand.
Seattle, USA. The Global Sawlog Price Index (GSPI) fell for the fifth consecutive quarter in the 2Q/19, reaching a two-year low. Log prices were down on all continents, with the biggest declines occurring in Europe, according to the Wood Resource Quarterly. Plentiful supply from storm-damaged and beetle-infested forests in Central Europe changed the log demand/supply balance and trade flow throughout Central and Northern Europe in the spring and summer.
In North America, there have been only small price adjustments in the major log markets the past 12 months. The only exception is the US Northwest, where sawlog prices have fallen from record highs in early 2018 to levels closer to their 25-year averages in the 2Q/19. Prices for domestically consumed Douglas-fir sawlog fell 20% from the 1Q/18 to the 2Q/19, while hemlock log prices were down 25% during the same period. Plentiful log supply, lower production at the region’s sawmills in the first six months of the year (down 2.7% from 1H/18), and reduced log exports to Asia (25% lower year-to-date than in 2018) are all factors which have driven down log prices in the first six months of 2019.