Global sawlog prices witnessed major decline during 3Q/14

SEATTLE (Scrap Monster): Sawlog prices declined in most of the 20 key regions around the world during 3Q. The Global Sawlog Price Index (GSPI) fell by 4.6% from th e3previous quarter to $85.56/m3. The biggest price declines occurred in the Nordic and Eastern Europe region, especially Russia, Western Canada, Sweden and the Czech Republic. The Index had reached a three-year high during 2Q/14.

Sawlog prices fell in both the local currencies and in US dollar terms, as the dollar was strengthening against most currencies during the third quarter. In US dollar terms there were some countries where prices fell quite substantially quarter-over-quarter, including Russia (-14%), Western Canada (-10%), Sweden (-9%), the Czech Republic (-9%) and Brazil (-9%), according to the Wood Resource Quarterly.

The downside pressure on sawlog prices were accelerated by weaker lumber demand in major markets including Japan, the US, Canada and Western Europe.

Generally, the current sawlog prices are 5-15% higher when compared with the 10-year averages. The regions with highest sawlog prices compared to ten-year average are Eastern and Central Europe. However, the prices in the Nordic region are well below the decade average price.

In Western US, weaker demand for logs in the export market has resulted in lower log export prices during the summer and fall, which was welcome news for domestic consumers of sawlogs. Prices for sawlogs have come down nine percent from their eight-year high early in 2014. Despite the recent decline, current price levels are still 15-20% higher than the ten-year price averages, according to the WRQ. Also, low raw material costs in the US South mills have aided to keep the sawlog prices almost steady during the past several years.

Courtesy: Wood Resources International LLC