Worldwide roundwood prices are falling, but there is still a constant distance between the high German and significantly lower international softwood roundwood prices, which determines a crucial competitive disadvantage for the German sawmill industry.
Although the Global Sawlog Price Index (GSPI) has fallen sharply, the German sawyers can't benefit. Moreover, the German sawmill industry expects a pressure on prices in 2016, especially on sawmill by-products, in relation with high raw material purchase costs.
The positive softwood lumber trade balance in favour of exports has shrunk dramatically over the course of 2015. Germany's exports of softwood lumber declined by almost 6.9%, down to 6.5 million cubic meters (a decrease of 470 thousand m3). At the same time, imports were up by 5 percent or 220 thousand m3.
Also, the global market competitiveness has increased a lot in the last years. The competition has intensified significantly in Europe and in the Far East. Because of the economic slowdown, the German sawmills couldn’t keep up the pace, losing market shares in many important markets.
The German spruce sawlog quality B is still around 49% above the recently published Global Sawlog Price Index for Q4 2015, despite the changed US dollar exchange rate (see picture above).
The past disadvantage of the expensiveness of raw materials for the German sawmills was compensated by the fact that sawmills were much better positioned on the global market and able to keep up with technology and equipment. However, since the raw material is increasingly cheaper worldwide, the locational disadvantage for the German sawmills cannot be compensated anymore. Thus, Germany has lost a lot of market shares on the foreign markets.
Another issue for Germany is the recent German Pellets insolvency. Effects are yet to come and combined with the past mild winter and thus lower demand for pellets, are more issues which will affect the German sawmill industry.