February saw continued stability in the timber market, with firewood prices maintaining a steady but slow decline. As the heating season draws to a close, a drop in firewood prices is a logical result, and this trend is expected to continue over the coming months, with firewood prices reaching their lowest point in May. Similarly, softwood sawlog prices remained unchanged in February; however, as the construction season restarts in the spring, the picture could change, according to information compiled by E-silva, the largest forest auction system in Latvia.

E-silva experts explain that in February, the most noticeable price drop was observed in industrial wood, compared to its rapid rise in the second quarter of 2022. However, the decline in fuel wood prices will only be relevant until May, as demand for this type of wood may change in the second half of the year when households and producers begin to prepare in earnest for the new heating season. Meanwhile, with the construction season restarting in the spring, it is expected that price changes in the softwood sawlog category may be on the horizon for the first half of this year.

Price and demand for firewood begin to slow down

Following a slight increase in the price of aspen firewood in January, it gradually decreased during February. Compared to January, the price of aspen firewood had fallen by 7 euros per cubic metre by the end of February, reaching a price of 60 euros per cubic metre, which is a drop of nearly 11%. Although a decline in firewood prices is being observed in the timber market, it has certainly not returned to the levels seen before the geopolitical situation became volatile. The spring of 2022 was an exception, and the price of firewood gradually rose at the start of spring, reaching unprecedented levels. However, it is expected that in May of this year, as in all previous years, the price of energy wood will reach its traditionally lowest point. Conversely, in the middle of summer, as households begin to prepare for the next heating season, a rise in prices could again be observed alongside an increase in the demand for energy wood.

What will spring bring for softwood sawlog prices?

Following the course set last December, with softwood sawlog prices experiencing a slight decline, they remained unchanged in January, and it is observed that softwood sawlog prices also remained at January levels in February, meaning no changes in the average price were experienced in this market segment. In February, the highest average price remained for large pine sawlogs at 94.19 euros per cubic metre, while the lowest average price was observed for medium and small spruce sawlogs at 87 euros per cubic metre. Although construction volumes have decreased due to inflation, there is still a shortage of timber in the market because timber imports from Russia and Belarus have been banned following the global economic and political shocks. The shortage of timber in the market has so far contributed to price stability, but in the spring, as the construction season restarts and demand increases, the situation could change with rising prices.

Stability has also arrived in birch timber prices

In February this year, the average price for birch veneer logs – 147.50 euros per cubic metre – was 28% higher than in February last year, which was 115 euros per cubic metre. Following the escalation of the situation in Ukraine and subsequent sanctions against the aggressor countries, the price of birch veneer logs continued to rise from February 2022 until January of this year, only experiencing a drop for the first time at the end of the month after a year-long climb. In February, compared to January, the average price remained unchanged, which indicates that stability has also arrived in the birch veneer log category.

Meanwhile, compared to the same period last year, the highest price for birch packaging wood in February this year is 67% higher, rising from 75 euros per cubic metre in 2022 to 125 euros per cubic metre this year.

Unprecedentedly high birch pulpwood prices replaced by stability

Last October saw an unprecedentedly high price for birch pulpwood of 130 euros per cubic metre, but with a gradual price decline beginning in November, the price has now stabilised at the start of this year. After a slight rise in the price of birch pulpwood at the end of January, a slight decline was observed again in February, reaching 83 euros per cubic metre.

E-silva is the largest forest auction platform in Latvia, operating as an industry-unifying forest sales system where logging companies, as well as local and foreign investors, compete for the opportunity to purchase timber felling rights and forest properties. Over the last seven years, the company has strengthened its position among Latvian and foreign clients.

The system offers open and transparent auctions for felling areas and forest properties that are safe, fair and economically beneficial for both forest owners and loggers. It is maintained by the Latvian full-service forest management company SIA Forest Mentor Group. More at: www.e-silva.lv