Timber Exchange review – Year 2019

The past few years have been favourable to the European timber market: demand has remained stable, timber sales have continued to grow and market participants have been actively investing in the improvement of the effectiveness of their production facilities. Export markets have continued to expand (Asian countries in particular), and the pre-crisis level of trade with the US has been reached.

However, the latest warm weather conditions dominating throughout Europe, in particular Central Europe, have affected the balance on the regional market. Due to climate change, the amount of timber damaged by bark beetles has increased throughout the region, which in its turn has raised the supply of timber in the region and affected the prices.

The rapid expansion of bark beetles in European forests has become a major challenge in the past years. In 2018, these insects damaged 40 million solid cubic metres of timber in Central Europe. The damage recorded in Sweden and France in 2019 was three times greater compared to one year ago; the damage recorded in Austria was 10 times greater compared to 2018.

The other global factors, e.g. the economic slowdown, Brexit and the US and China trade wars may also have a detrimental effect on the prices of timber in the region. The problems in forests continue, and the prices that formed over the last quarter of last year are likely to continue to dominate in 2020.

2019 in Lithuania was the year of the price bubble burst on the timber market. The prices of all assortments have decreased both during short-term and long-term auctions by up to 46%. The same trend was also recorded in Latvia and Estonia. All this is a consequence of the surplus of timber in the region.

In 2019, 2,139,972 solid m³ of timber was sold under short-term and half-year contracts via the Electronic Timber Trading System (ETTS). A total of 1,389 auctions were organised, of which 892 auctions were announced as completed. The annual increase in the number of completed auctions was 103%. The auctions were attended by 361 buyers from Lithuania, Latvia and Poland. Lithuanian companies acquired 92.7% of the sold timber, and Latvian and Polish companies respectively acquired 6.8% and 0.5% of the timber. The total value of the sold timber amounted to EUR 73,148,455.

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