Wet weather and rising production costs are the reason for uncertainty in the softwood markets.
According to TTJ’s report, after a reasonable start to Q2, softwood market price levels started to firm up in April backed by a reduction in the availability of sawlogs. Wet and stormy weather conditions across northern Europe made the forest floor too soft for log extraction leaving the sawmills short of raw material and certain lengths in carcassing specifications.
In terms of consumption, April proved to be a washout with flooding affecting UK building sites causing a continued slow-down of construction from Q1. There was an expectation in the trade that once warmer and dryer conditions prevailed in May and June, demand would strengthen and engender some degree of confidence among merchants and importers.
In reality, the level of demand showed little sign of any upswing and a degree of panic worked its way back up the supply chain. In fact, distributors with landed inventories that were subject to quay rental charges came under pressure to cut prices in order to maintain some volume. In the case of C24, price levels started heading backwards towards those in play during February and March. For the shippers working on market share, this was a worst-case scenario as the battle for each order led to fierce competition resulting in zero returns against sales.
This current trend of uncertain demand and reducing prices has masked some fundamental issues in the supply chain lingering in the background. Log costs and production costs are increasing in Scandinavia while in Latvia there is a current moratorium in place prohibiting the felling of spruce trees due to plant health issues. Also, in the wings that might affect EU forestry, is the EUDR (Deforestation Regulation EU 2023/1115) which could have some effect on future growing and harvesting practices.
-
That’s a remarkable amount of work hours for a single machine, the Norcar 600 owned by Erkki Rinne is taken well care of, it even has the original Diesel engine.
-
Kieran Anders is a forestry contractor working in the lake district. His work involves hand cutting and extracting timber using a skidder and tractor-trailer forwarder.
-
It is not possible to eliminate chain shot, but there are simple steps that can be taken to reduce the risk.
-
Arwel takes great pride in the fact that the mill has no waste whatsoever, “the peelings are used for children’s playgrounds, gardens and for farm animals in barns in the winter and the sawdust has multiple uses in gardens and farms as well.
-
Timber hauliers need to encourage young blood in, and also look after the hauliers we have, we need make the sector a safe and positive place to work.
FIND US ON
Related Posts
With the end of June in sight and the BOE holding MLR interest rates at 5.25% housebuilding is slower than expected and merchants report that site call-offs for first and second fix materials are erratic. As always this follows regional trends, but overall site activity is behind schedule.
In addition to the tight fiscal background affecting new mortgage take-ups and homebuyers’ problems paying existing commitments, the snap general election that will take place on July 4 has created political uncertainty as all eyes are on the spending and taxation priorities of each Party.
This challenging economic backdrop has made softwood buyers extremely cautious as far as the forward market is concerned, with many keeping purchases “just in time” and on a hand-to-mouth basis. During the first quarter of 2024, import trends had already shown a drop against the same period last year by more than 7%, and on a wider scale, Q1 figures have shown a decline in softwood imports for each of the last three years.
Despite the current weakening in the market, there is an underlying shortage of softwood sawlogs in both Sweden and the Baltic States. With Latvian log prices rising, many mills are still steering away from producing C24 as it is almost impossible to cover their costs let alone make a profit. Some Swedish joinery grade producers have switched part of their volume over to carcassing production in the hope of gaining a foothold in the market ready for when conditions improve. There is hope that when shortages start to bite, they might drive market prices up to a sustainable and profitable level.
But for the time being, the direction of price travel is solely being directed by demand, and that is on a weakening trajectory.
Source: ttjonline.com
Forest Machine Magazine is written and edited by a forest professional with over 40 years hands on experience. We are dedicated to keeping you informed with all the latest news, views and reviews from our industry.
#homeoflogging #writtenbyloggersforloggers #loggingallovertheworld