European log prices head South, US prices up but patchy

Demonstrating the variability of global markets, prices for sawlogs in Europe fell in the September quarter, while US prices generally rose in the September and December quarters. Despite the different periods for the reports, the variance in prices seems in part to reflect the different overall trajectories of the European and US economies.

All five of the European/Scandinavian nations reported in the Baltic Region Pine Sawlog price series experienced declines. The largest was the fall in Lithuania (down 6.1% at USD64/m3) and the smallest was Finland (down 1.9% at USD62/m3). As the chart below shows, the September quarter continues the medium-term trend decline in European sawlog prices, across the board, measured in US Dollars.


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Although the European price declines have been continuous and across the board, they have not been entirely uniform in their trajectory. Estonian sawlog prices remain the highest in the series across all time periods, but other prices have changed places, including in the September quarter.

In US dollar terms at least, Swedish sawlogs are no longer the cheapest, with that position held by Norway for the past year and a half. Similarly, Lithuanian sawlogs have declined most in price since the peak of three years ago. Once a close second highest price behind Lithuania, they are now in third place, having fallen below the price of sawlogs from Finland for the first time in four years.

The situation is different in the US, where, as the chart below displays, sawlog prices maintain their relative positions, except for the always uncertain price of British Columbia’s Douglas Fir species.


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Of the three more stable prices, the British Columbia Hemlock saw prices tick down in the September quarter, falling to USD39.88/m3 on a delivered basis and nearing the bottom of its range.

The two consistent and observably linked grades of North American sawlogs rose for the third successive quarter in the December quarter 2016. Compared with the previous quarter, Washington Douglas Fir prices rose 2.0% to USD92.41/m3, while the price of Washington Whitewoods rose 4.3% to USD75.93/m3.

The price of British Columbia Douglas Fir rose a sharp 32.8% in the September quarter, compared with the previous September quarter, recording a delivered price of USD112/m3.

Ongoing price variations between European and North American log prices allow the observation that it is little wonder that European sawnwood/finished products hold strong positions in markets like Australia.