If exactly a year ago, buying timber due to scarcity caused by the pandemic and the war in Ukraine had become a “almost” luxury for a few, let’s remember the prices that reached 600 euros per ton for pellets, sawdust for packaging cost between 400 and 480 euros, while laminated wood could reach 1,000/1,100 euros per cubic meter.
Today, the situation has radically changed. Prices have on average halved, with a strong acceleration in the last month. For example, untreated fir wood has dropped to 34.2 euros per cubic meter in the third quarter, compared to 75 euros in 2022. This reversal of the trend is evident throughout Europe and is causing significant losses to sawmills that are now forced to sell off the wood accumulated when prices were high.
The main cause of this situation, at least in Italy, is the long tail of the effects of the Vaia storm, which hit about 14 million trees five years ago. Difficulties in managing this natural disaster have led to the need to accelerate logging, flooding the market with a large quantity of wood at a time when the demand from processing companies was starting to slow down due to the global economic slowdown.
Sawmills, now overloaded with product, are facing declining demand and plummeting prices. The situation, already ongoing since the second half of the previous year, seems destined to continue into 2024.
The demand for wood “could” pick up in the medium to long term, once again supported by European policies for sustainable construction, but in the short term, factors such as the slowdown in the global economy, the rise in interest rates, and the end of incentives for housing in Italy will contribute to keeping wood prices low.
