Lithuania’s industrial companies bought more raw material at the half-yearly timber auction

2022 07 21

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 %

Lithuania’s industrial companies bought more raw material at the half-yearly timber auction

RESULTS OF THE HALF-YEARLY TIMBER AUCTION

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