A look at the world market shows that the price of wood is going down, especially in the USA. What does that mean for Switzerland?
Why is? The corona pandemic drove the price of wood to unprecedented heights last year. Wood has become a sought-after and rare building product. But now the wood prices on the world market have plummeted again – by almost 50 percent since the beginning of this year.
What are the reasons for that? Prices in the USA are falling because production and supply are increasing again, as Michael Meuter, media spokesman for Lignum, the Swiss timber industry association, explains to SRF. “Buyers and sellers are realizing that the shortage is over.”
Consumers have to spend more money again on things like petrol and groceries. Construction projects are now back on hold.
As early as April, a survey in the USA showed that only about twelve percent of building materials dealers still had insufficient timber inventories, according to Meuter. This is also due to inflation: “American retailers are experiencing a drop in demand for lumber because consumers are having to spend more money again on things like gas and groceries. Construction projects are now back on hold.”
What does that mean for Switzerland? According to the association spokesman, a direct impact on Switzerland is not to be expected. “But in the medium term, if the current trend in the USA persists, it will also push European export prices for wood down.”
If the exported quantities find their way onto the EU market again, that will certainly not be bad for Switzerland either.
US exports are only really a business for the really big ones. “But if the quantities exported are increasingly coming back to the EU market, that’s certainly not bad for Switzerland either.” Because the local hardware store cannot supply itself with wood from its own resources.
Where are the domestic prices currently? The round and sawn timber prices are currently stable, as Meuter says. “With the products that are available in large quantities from many sources, there may even be a certain relaxation in prices.” But they certainly remained higher than before the pandemic. That’s not negative.
New sawmills in the canton of Graubünden
An extensive investment project is currently under way in Graubünden. Several regional sawmills and a processing plant are planned to mobilize the potential of the Graubünden forest. “I think that’s a very nice and groundbreaking project, a good approach,” says Michael Meuter, media spokesman for Lignum, the Swiss timber industry association. “You can tell that something has started to move with this situation. This is also an opportunity, an opportunity for Schweizer Holz.”
“Wood was undervalued for a long time, and with the log price that has now been achieved, Swiss producers can finally work reasonably economically again.” That is important. And the Swiss wood processors would also benefit: “They only increased their prices moderately and are now fully competitive compared to imports. That also allows them to invest again.”
Has the wood shortage now been resolved? “The supply situation is currently good, the sawmills are working to capacity,” says the industry insider. The dealers have filled their warehouses again and are able to deliver. “There are shortages of individual products – for example oak, which is in great demand for parquet,” admits Meuter. “But that not only has to do with a lack of production, with the stop-and-go during Corona with interrupted supply chains, but also with the Ukraine war.”
What are the effects of war and sanctions? According to Meuter, the war in Ukraine and the sanctions against Russia restricted production and transport. “There is little or nothing coming from Ukraine, but also from Belarus and Russia.” About ten percent of Russian wood is in the European wood market, this is falling away, you can feel that.
Michael Meuter is Head of Information at the umbrella organization of the Swiss forest and timber industry Lignum.
The supply of the market is guaranteed in any case, but the demand for wood products remains high. “And so it is still advisable as a builder to plan a project sufficiently in advance and not simply assume that just-in-time logistics will play out again.” Because you never know what the future will bring.