France: disappointing softwood log markets in autumn 2016

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Even though the French sawmill owners were hoping for a better second half of 2016 than the first, the improvement seems to be waiting for the end of September. The majority of the interviewed industry representatives speak of a rather difficult recovery since the end of summer vacation with very irregular orders.

Some describe the market as anxious with hardly predictable behavior of the customer. That's why sawmill owners have to face new reality. "The loggers do not play the role stockists anymore. Now that's the sawmill owners who have to do it and to be responsible for very short delivery terms with that putting us under enormous pressure," says Guillaume Cretin representing the sawmill Clerc.

In fact, the so-called recovery of the building sector does not result in significant increases in orders for the French sawmills. "September is disappointing. Unlike Germany where construction has rebounded, so far the French construction sector has no impact on the mills, "says Etienne Renaud, the President of the trade union Les Résineux from Franche-Comté.

But at the same time, raw material prices remain high in comparison with the stagnant lumber market. This is especially true in the Vosges mountains and even more in Jura. At the Gerardmer auction (Vosges) held on September 22, fir and spruce prices remained firm compared to the previous quarter (share of unsold goods came up to 19%).

A week later in Champagnole (share of unsold goods came up to 16%), in spite of the assortment being deemed by buyers as less attractive compared to June, the ONF auctions in Franche-Comté recorded relatively stable prices which, however, were mixed. Prices varied much by product and by logging location. 

However, some sawyers report lower fir prices in southern Jura department. For its part, the trade union Les Résineux from Franche-Comté mentioned a slight price drop over the last 3 month (-1%), which indicates stability taking into account the quality effect. However, spruce and fir are still sold at the highest prices in the forests of Doubs. In the upcoming months sawmill owners expect supply costs to be more in line with lumber market's state.

Table 1:

                                                          Fir price dynamics in the French east

                                                Prices expressed in euros per m3, standing timber, under bark 

                                                             ONF Auctions in Franche-Comté

  26/10/15          13/04/16         21/06/16         26/09/16      

Price changes of over 3 months

1 m3 53,25 46,75 51,75 51,40 -0,7%
1,5 m3 56 50 54,25 54,60 +0,6%
2 m3 58 52,25 56,10 57,10 1,8%
2,5 m3 59,25 54 57,6 58,9 2,4%
3 m3 60,5 55,4 58,5 60,3 2,9%
3,5 m3 61,4 56,75 59,5 61,7 3,5%
4 m3     60,4 62,6 3,6%

At the auctions in Franche-Comté the share of unsold goods changed throughout seasons in the following manner: it came up to just 2% in fall 2014, having increased to 24% in April 2016, then equalled 13% in June 2016, and then 16% in September 2016

NB: the « log quality» variable wasn't taken into account in this price chart

Source : Robert Wood, October 2016

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