Timber prices 2022 – 2023, up or down, what is the expectation?

Availability of timber has improved

Wood availability has improved in the Netherlands. Good alternatives have been found in other regions of Northern Europe, such as Scandinavia and the Baltic States, for example, for the dried-up wood flows from Russia, Belarus and Ukraine which, for example, Germany alone was 25% dependent on
Sawmills have managed to rebuild their production recently, after the COVID-19 virus had a negative impact on this in previous years. This backlog seems to have been cleared.

 

Timber prices in 2022, War between Ukraine and Russia, previous export sanctions and transport

The rise in timber prices continued in early 2022. In 2021, timber prices rose faster than ever before, stagnating slightly at the end of 2021. But in 2022, already high timber prices rose further, caused by Russian government sanctions on roundwood (logs) exports from 1 January. Then war broke out between Russia and Ukraine, which again added tension and uncertainty to the timber market, resulting in further price increases.

 

As of 1 January 2022, Russia has introduced export restrictions on roundwood

Much of the wood used in Europe originally came from Russia. From 1 January 2022, Russia introduced export restrictions on roundwood, further limiting European imports of Russian roundwood and thus availability. Also, Russia increased export taxes immensely by up to 80%. Also, 29 out of 30 border crossings were closed to timber exports. These developments had a huge impact on timber prices in Europe and the Netherlands.

 

War between Ukraine and Russia: supplies Ukraine slowly resume

The war that has broken out between Ukraine and Russia has also had a serious impact on timber prices. A large package of sanctions imposed on Russia and Belarus by the EU, the United States, Canada and other countries has brought trade and thus wood imports from these countries to a standstill. All wood coming from Russia and Belarus is “conflict wood” and therefore should not be used in PEFC-certified products. The FSC also bans all trade in FSC-certified wood products from Russia and Belarus because of the connection to the armed invasion of Ukraine. Wood products without the above certifications may not be used and sold in certified products such as those we make at Naus Agriboxes
The war situation made it impossible to import timber from Ukraine as well. The EPV (Dutch Packaging & Pallet Industry Association) and the NTTA (Association of Dutch Wood Companies) confirmed this. After a few months, however, timber imports from Ukraine have become partly possible again.

 

Pressure on transport

Transport prices also continue to rise, again affecting timber prices. There was already a shortage of available drivers and trucks, but the war between Ukraine and Russia is causing an even greater shortage. Until recently, Russia imported a lot of goods. Russian drivers would take a shipment of wood en route to the Netherlands to avoid driving empty. This no longer happens. Many Eastern European drivers come from Ukraine or Belarus. These drivers are no longer deployable because they have been drafted for their national army.

 

2022-2023 timber price expectation

Now, in the 4th quarter of 2022, we still see a “slight” drop in timber prices, but current prices of wooden products are stabilising. Availability is sufficient. The coming period should reveal whether this is caused by increased availability or a decrease in demand. The economic climate also influences this. Among the sawmills, there is talk of a reduction in capacity to regain a cost-covering market price for wooden products.

In any case, Naus Agriboxes will keep you updated on timber price developments.