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Hardwood log availability is now coming under considerable pressure in Europe due to the combined effects of declining forest productivity in the face of climatic disturbances, rising log exports to China, and a wide range of new policy and regulatory measures.<\/p>\n
This has meant that prices for European hardwoods have remained relatively firm, particularly for oak, even as consumption is declining in the face of the economic slowdown.<\/span><\/p>\n These are key messages from the latest Annual Report of The European Organisation of the Sawmill Industry (EOS) published in June. The EOS Member Countries are Austria, Belgium, Denmark, Finland, France, Germany, Latvia, Norway, Romania, Sweden, and Switzerland.<\/p>\n The Annual Report includes sawnwood production and consumption data for the 11 EOS Member Countries alongside the UK and Italy as major consumers. EOS estimate total sawnwood production in the 13 countries to have been 92.3 million cubic metres in 2022, a 4% decline compared to the previous year.<\/p>\n Sawn softwood production in the 13 countries fell 4% to 86.6 million cubic metres in 2022 but was still at the second highest annual level since before the 2008 financial crises. Sawn softwood production in these countries was rising almost continuously between 2013 and 2021.<\/p>\n Sawn hardwood production in the 13 EOS countries was down 6% to 5.7 million cubic metres in 2022. In contrast to softwoods, hardwood lumber production in these countries was sliding between 2015 and 2019, and only picked up briefly in 2021 when demand increased rapidly during the COVID home improvement boom. Sawn hardwood production last year was only marginally above 2020 and was at the second lowest level since 2013. In 2023, EOS forecast that total sawnwood production in the 13 countries will decline a further 2% to 90.1 million m3, with sawn softwood production down 2% to 84.6 million cubic metres and sawn hardwood production falling 4% to 5.5 million metres.<\/p>\n In relation to hardwoods, EOS observe that Europe\u2019s three largest lumber producing countries \u2013 Romania, France, and Germany - all reported significant declines in 2022.<\/p>\n This was driven more by constraints to log supply than by falling consumption, although slowing demand was a major feature of the market, particularly in Germany and Romania, in the second half of last year.<\/p>\n EOS suggests that \u201cnational and European legislation is curbing the availability of raw materials while many hardwood species remain underutilised. The quality of some species such as beech is also declining which is posing a new set of challenges for many mills particularly but not only in Germany.<\/p>\n Hardwood companies that rely on foreign trade are negatively affected by the geopolitical situation: longdistance exports are hampered by high freight rates, pandemic-related tension in China and rocketing fuel prices\u201d.<\/p>\n Another challenge on the supply side according to EOS is that a significant proportion of logs \u2013 particularly of oak, by far the most popular European hardwood species, are being exported to China and thereby diverted away from European mills. China\u2019s import data shows imports of oak logs from European countries (excluding Russia) of 981,000 cubic metres in 2022, up 20% from 818,000 cubic metres the previous year.<\/p>\n Total sawnwood consumption in the 13 EOS countries is estimated to have declined 13% to 63.8 million cubic metres in 2022 and is expected to fall another 2% this year. Sawn softwood consumption fell 14% to 58.7 million cubic metres in 2022 and is forecast to fall 2% this year. Sawn hardwood consumption fell 10% to 5.2 million cubic metres in 2022 and is forecast to fall a further 1% this year.<\/p>\n The decline in European sawn hardwood consumption is due to shortages in domestic hardwood supply, particularly for the most favoured species oak, which kept prices high, at a time when demand was being undermined by wider geo-political and economic trends. The war in Ukraine has had a particularly detrimental effect on buyer sentiment, contributing to the very sharp rise in energy prices and wider inflation which in turn led to a big increase in interest rates and a sharp rise in the costs of borrowing in European countries.<\/p>\n The direct effect of the war on supply of hardwood lumber in Europe, while significant, has not been as severe as in the softwood sector. According to EOS \u201cwhile imports Russian make up about 0.5% of total EU sawn hardwood consumption, Ukrainian imports make up about 2.5-3% of European consumption, so overall the market share of the three countries combined is about 3-3.5%. Belarus does not export sawn hardwood to Europe. Importantly, Ukrainian exports of hardwood lumber are overwhelmingly valuable sawn oak products\u201d.<\/p>","protected":false},"excerpt":{"rendered":" Hardwood log availability is now coming under considerable pressure in Europe due to the combined effects of declining forest productivity in the face of climatic disturbances, rising log exports to China, and a wide range of new policy and regulatory … Continue reading