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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.

Feb 26, 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 – Many statistics show that the year 2018 was quite a good year for the Finnish forest industry sector. According to the Finnish Forest Industries Federation, all main product groups except plywood showed production gains. In sawn timber and paper, the production growth from 2017 was about 1%, while pulp and cartonboard showed over 5% growth. Preliminary wood procurement numbers by Luke indicate that in 2018 the total wood procurement for industry use in Finland was a record-high 67.2 million m³. This is a 4 Mm³ increase from 2017, which also was the previous record. Of the total wood procured, 57% was pulpwood and 43% logs.

During the Wood from Finland conference held in Helsinki by the Finnish Sawmills association, the sawn timber market was analysed from different perspectives, the latest statistics for the Finnish sawn timber exports were analysed and some prognoses for the future development were heard as well. The increase of the Finnish sawn timber exports to China in 2017 did not last long and the volumes decreased by about 40% in both redwood (pine) and whitewood (spruce) in 2018. Total exports of whitewood decreased by 14%, while redwood exports remained about the same, especially due to an increase in Algerian imports. The forecast for total Finnish exports for 2019 is about the same as in 2018.

The roundwood trading volumes in January showed a decline from the previous month but went up from January 2018, according to the wood trade statistics from the Finnish Forest Industries Federation. The total volume of the grades covered by our indices decreased by 5% from December, but increased by 8%, y-o-y. Compared to January 2018, all individual grades showed growth, the largest gain being in the pine grades. Both pulpwood and log volumes went up by 8% on average. The smallest growth rate was recorded by spruce pulpwood at only 1%. From the previous month, the volumes went down by about 10-15% in coniferous log grades while birch log volumes showed marginal growth. Pulpwood spruce recorded the highest growth rate of over 20%. The average prices showed grade-wise mainly descents. The PIX Softwood Sawlogs Finland index value kept heading down, now by 2.35 euros, or by 3.63%, and settled at 62.32 EUR/m³. The PIX Birch Sawlogs Finland index value decreased by 1.73 euros, or by 3.66%, ending up at 45.53 EUR/m³. The PIX Pulpwood Finland benchmark value held on to its downward trend, though less than the log indices, moving lower by 6 cents, corresponding to 0.33%, and the index stopping at 17.98 EUR/m³.

The sawn softwood timber export prices kept pointing downwards. Based on January numbers, the PIX Sawn Timber Pine FAS Finland went down by 9.75 EUR/m³, corresponding to 4.80%, ending up at 193.17 EUR/m³, and the PIX Sawn Timber Spruce FAS Finland went down by 5.62 EUR/m³, or by 2.77%, closing at 197.40 EUR/m³.

Please note: The weighting of the pine sub-indices was updated this month, resulting in a more significant drop in the main index value. Using the previous index weights, the decrease would have been smaller, about 3 euros or about 1.5%.

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.