The timber market throughout April and May continued to be dictated by the state of emergency declared at the start of April to combat the spruce bark beetle. In accordance with the emergency restrictions in place, spruce logging remains strictly limited until the end of June, which means that not only is the volume of Latvian timber on the market shrinking, but the forest harvesting sector is also stagnating. Furthermore, contrary to expectations, sawlog prices saw a moderate drop in May, and due to low demand, stock is beginning to accumulate on the market. Meanwhile, the price of fuel wood hit its lowest point in May, as previously predicted, according to data compiled by the largest forest auction system in Latvia, E-silva.
Expectations of a construction season revival in April brought with them the hope that demand for softwood sawlogs might increase in May, thereby raising its value on the market. However, contrary to this, both rising inflation and the European Central Bank's interest rate hikes have had a significant impact on the construction sector – building has become more expensive and the construction of new homes has decreased. As a result, demand for finished wood products, such as beams or boards, has fallen. Through a chain reaction, demand for roundwood has also decreased, which is why the price of sawlogs in the timber market is falling, albeit moderately. The overall dynamics of the timber market going forward are difficult to predict.
Construction season has begun, but sawlog prices are falling
Following stability in the average price of softwood sawlogs during the autumn and winter, a decline across all categories followed in May, influenced by both the bark beetle situation and reduced construction volumes. Compared with April, the average price in May fell most sharply in the small sawlog category, with the average price of small spruce sawlogs decreasing by 12% to reach €76/m³, while the average price of small pine sawlogs dropped by almost 14% to €75/m³. Average prices in the medium sawlog category experienced a downturn ranging from 9% to 10%, whereas in the large sawlog category, they fell by between 8% and 11%.
Birch prices continue a moderate downward trend
In May, similar to March and April, the average price of birch veneer logs continued to fall, and slightly more sharply than in April, reaching almost €140/m³. Compared with April, this is a decrease of approximately 2%, but compared with the highest average prices of the year in January and February, the price has fallen by approximately 5%, or by €7.75/m³.
Contrary to earlier suggestions that the ban on logging in spruce stands could cause birch prices to see a slight rise in the coming months, the price of birch for packaging nonetheless saw a decrease of approximately 3% in May compared with April, reaching €107/m³.
Firewood prices reach their lowest point
Despite minor fluctuations in the price of aspen firewood between March and May, with the price briefly increasing to between €55 and €58/m³ at one point, the price of aspen firewood returned to the March and April level of €50/m³ by the end of May, reaching its lowest point in the month accordingly.
Pulpwood prices continue to fall in May
In May, although more slowly than in previous months, the highest price for birch pulpwood continued to fall, decreasing to €65/m³. Compared with the start of the year, when the highest birch pulpwood price had been gradually falling each month, it has decreased by almost 24% over the four-month period ending in May. The price of spruce and pine pulpwood is also continuing its downward trend, reaching €62/m³ in May.
For more information, see: https://e-silva.lv/aktualitate/prognozes-ko-latvijas-koksnes-tirgus-nesis-turpmak-vel-ir-neskaidras