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FOEX Indexes Ltd is an independent company providing audited, trade-mark registered pulp, paper, recovered paper and wood based biomass price indices.

Aug 27, 2019

Market Comments

PIX Wood Finland and PIX Sawn Softwood Timber FAS Finland

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PIX Wood Finland and PIX Sawn Softwood Timber FAS Finland – The summer season has quieted down the wood markets and wood procurement in Finland compared to previous months and y-o-y. According to Luke, the total felling volume decreased by about 20%, y-o-y, in June. Procurement from state- and company-owned forests decreased especially. The total procurement volume was 4.0 Mm³, of which a bit more than 40% were logs and the rest was pulpwood. In addition, 427,000 m³ of energy wood was collected. The January-May statistics for Finnish wood imports show an 18% growth, y-o-y. The import volume was about 4.6 Mm³, which consisted of about 60% pulpwood and more than 30% woodchips. Only 4% of the imports were logs.

UPM is planning to curtail production and maybe temporarily lay off some employees at its Pellos plywood mill in eastern Finland, according to media reports. The reasons for this are said to include Brexit and the overall uncertain situation of the global economy, which reduce demand for coniferous plywood. The possibly reduced need for logs would be felt the most in the region surrounding the mill.

According to Wood Resources International (WRI), storm and insect damage has resulted in an oversupply of logs in Germany and thus reduced prices. The prices of logs have fallen by 13%, y-o-y, and along with this, the sawmills have increased production volumes. This has led to a 10% increase, y-o-y, in sawn timber exports during Q1/19.

The roundwood trading volumes kept decreasing both from the previous month and the previous year, according to the wood trade statistics from the Finnish Forest Industries Federation. With July being the main holiday month, the total volume of the grades covered by our indices decreased by over 40% from June. All grades showed decreasing volumes from the previous month, by about 35-45%, the only exception being birch pulpwood with a less than 30% decrease. Comparing the volume to the number a year ago, the total decrease was 8%. Year-on-year, pulpwood volumes showed an increase, going up by 10%, while the log volume decreased by about 25%. Especially spruce pulpwood showed a significant increase of 35%, while spruce logs went down by almost the same percentage. The PIX Softwood Sawlogs Finland index value continued its drop and contracted by 26 cents, or by 0.44%, with the index settling at 58.19 EUR/m³. The PIX Birch Sawlogs Finland index value decreased by 50 cents, or by 1.12%, landing at 44.20 EUR/m³. The PIX Pulpwood Finland benchmark value turned down again, decreasing by 34 cents, corresponding to 1.87%, with the index closing at 17.88 EUR/m³.

The sawn softwood timber export prices continued their downward trend in July, as a majority of the data in the index deteriorated. Based on July numbers, the PIX Sawn Timber Pine FAS Finland index declined by 5.21 euros, corresponding to 2.89%, to 175.09 EUR/m³. The PIX Sawn Timber Spruce FAS Finland benchmark went also down this month, decreasing by 4.61 euros, or by 2.40%, and closing at 187.30 EUR/m³. The decline from the January data is 9% in pine and 5% in spruce.

The PIX Wood Finland price indices are based on the monthly wood trade data by the Finnish Forest Industries Federation, which we convert to a volume weighted 3-month moving average for our benchmark values, after removing the extreme highs and lows before the index calculation. The PIX Sawn Softwood Timber FAS Finland indices are currently based on monthly price reporting from Finnish export sawmills. The indices are calculated with fixed weights on six sawn timber quality grades, which are individually weighted by the volumes reported by the sawmills.