Lithuania’s industrial companies bought more raw material at the half-yearly timber auction
An auction organised by the timber auction administrator Baltpool took place at the end of last week for the purpose of concluding half-yearly contracts, and this year it was held according to the procedure temporarily established by the Government of the Republic of Lithuania. The aim of it was to control the demand in timber trade auctions, to ensure protection against intervention or speculative prices, which would lead to market distortion and adversely affect the execution of long-term contracts.
The temporary order was approved by the Government in mid-June due to the lack of wood raw material in the region, caused by the introduction of sanctions by the EU against Russia and Belarus.
In the half-yearly auction, a total of 742 thousand solid m3 of various assortments of timber were bought – 90.2 % of the total amount offered by SFE. The weighted average price of the planned transactions amounted to 84.11 Eur/solid m3 or 32 % higher compared to the previous half-yearly auction.
“Despite the newly enacted changes and extremely short deadlines for the organisation of the auction, the auction itself went well. The results of it show that, according to the temporary procedure, industrial companies purchased 10 % (37.8 thousand solid m3) more timber, while foreign companies and timber trading companies (intermediaries) purchased 23 % (41.8 thousand solid m3) less timber under the temporary arrangement than they would have purchased under the old arrangement,” explains Baltpool CEO Andrius Smaliukas.
The prices of the timber from which the products are cut – sawlogs, hard leafy short timber, packing logs – were about 20 % higher than in the previous auction, while sawlog transactions were concluded for 64.1 % of the offered quantity. Meanwhile, the prices of milled timber production – pulpwood, wood panels, firewood – have doubled and practically the entire amount of raw material offered has been sold. Such changes could have been caused by the fact that the milled product assortments used to be imported from Belarus, therefore, after the EU sanctions came into effect, the lack of this raw material was felt in the market and this was appropriately reflected in the prices.
RESULTS OF THE HALF-YEARLY TIMBER AUCTION
|Weighted price of the previous half-yearly auction, Eur/solid m3||Quantity offered by SFE, solid m3||SFE initial price, Eur/solid m3||Quantity purchased, solid m3||Sold from quantity offered, %||Average weighted price of completed transactions, Eur/solid m3||Price change compared to the previous half-yearly auction, %|
|Hard leafy short timber||222.89||255||225.82||255||100.0 %||297.43||33 %|
|Sawlogs||103.11||198,928||103.82||127,520||64.1 %||124.73||21 %|
|Packing logs||81.15||122,445||84.27||122,445||100.0 %||96.37||19 %|
|Pulpwood||48.80||121,918||54.08||119,018||97.6 %||96.66||98 %|
|Wood panels||40.90||96,012||44.85||96,012||100.0 %||78.69||92 %|
|Firewood||41.48||108,397||42.55||107,047||98.8 %||76.38||84 %|
|Logging remains (coated)||35.15||1,825||35.73||1,825||100.0 %||61.42||75 %|
|Logging remains||34.28||92,085||34.35||89,645||97.4 %||53.30||55 %|
|Logging remains at the logging site||19.68||80,549||17.69||78,199||97.1 %||31.99||63 %|
|Total||63.93||822,414||58.55||741,966||90.2 %||84.11||32 %|
|New procedure (with limits)||Old procedure (without limits)||Change, solid m3||Change, %|
|Industrial companies||393,528||355,673||37,855||11 %|
|Foreign companies and intermediaries||143,984||185,822||-41,838||-23 %|
|Small participants (purchased quantity up to 1000 solid m3)||33,240||31,957||1,283||4 %|