France: coniferous timber and lumber market in a crisis

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Crate wood producers suffer the negative market situation

The results of 2016 are not likely to be satisfactory for softwood processors. At the latest wood auctions in November and December, most sawmill owners reported mixed results of their activities over the last twelve months. The decline in roundwood prices observed the fourth quarter of the year (see table below) reflects the volatility of demand in terms of volume of business and price pressure on board markets.

The results of activity carried out in summer were not in line with expectations and no significant improvement was reported at the end of 2016. Industry professionals play it by ear and review the market situation on a daily basis. Large enterprises seem to suffer more than the smaller ones. "We haven't seen any positive changes on the construction lumber market since beginning of the season in September," says Fabrice Chauvin, CEO of Scierie Chauvin Frères.

In the segment of processed wood (dried&planed lumber, finger-jointed, laminated wood etc), the price war is raging. "The market is very shaken because it is no longer able to absorb the overcapacity of European production; and the German, Austrian, Baltic, Scandinavian and French producers are fighting to sell their products by means of significantly reducing prices," commented the French industry professional.

The situation is not that brilliant in crate lumber sector either. "The instability of the orders marked 2016," observes Fabien Salles, the head of the eponymous sawmill located in Lozère. This entrepreneur reports, that prices for boards produced by his mill decreased by 2 to 3% in one year. The prospects are worrying, some colleagues in his region have even had to lay off some employees. 

As to sawmills' by-products, they have experienced a sharp drop in prices over the last 18 months. The fall in sawdust prices now appears to be dampened, but the situation remains complicated for wood chips, and no improvement seems to be taking place in the upcoming months.

There seems to be a certain level of anxiety in respect of the beginning of 2017, especially since the winter period doesn't really encourage activity in the building sector. However, some producers want to hope for the better. "We hope that the demand will rebound once the spring starts," said Jean-Paul Sève, CEO of the Monnet-Sève group.

 

FIR PRICE DYNAMICS IN JURA DEPARTMENT (FRANCE)

                                                    Prices in euros per m3 of standing timber under bark                           
 

26/10/15

21/06/16     26/09/16                 16/11/16        Change in %
2 months 1 year
1 m3 53,25

51,75                  

51,40             50                 -2,7                    -6,1                    
1,5 m3 56 54,25                      54,60                    51,5             -5,7                    -8
2 m3 58 56,10                     57,10                      52,5             -8                       -9,5
2,5 m3 59,25 57,5                        58,9                        53,3             -9,5                    -10
3 m3 60,5 58,6                        60,3                        54                 -10,4  -10,7
3,5 m3 61,4 59,6                        61,7                        54,5             -11,7  -11,2
4 m3 62,40 60,4                        62,6                        55                 -12,1  -11,9

The fir price decrease is more prominent for bigger assortments than the smaller ones.

In spite of the demand being satisfactory, the share of unsold goods keeps growing in the end of 2016.

 Namely, 16% in septembre 2016 against 24% in novembre 2016 at auctions in Jura

Source : Robert Wood, according to figures from ONF auctions in Franche-Comté

 

 

 

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