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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.

Nov 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 – The exceptionally high supply for logs in the European market is still stirring the forestry sector from wood sales to sawn timber production. The Finnish sawmills are struggling with the competition from the central European producers who have inexpensive raw material available and also preparing for global political risks as well as economic issues. The impact from the market disturbance, especially the high supply of damaged wood, is estimated to last even some years. Russia has reportedly started exporting more sawn timber to Europe and MENA region, as Chinese demand has been deteriorating. Russia has an advantage in these markets from the weak Ruble. Some positive signs can be seen still as globally the building sector seems to fare better than some others and demand for sawn timber has been stable.

Natural Resources Institute Finland, Luke released a report covering the Finnish forest sector development during the coming years. The growth of the economy is expected to slow down during this and next year in most main markets for forest industry products. Along with this development and other factors, Luke expects the sawn timber production to decrease by a few percent this year and the next. They also predict that the loggings will decrease during 2019 and 2020.

The roundwood trading volumes increased compared to the previous month, according to the wood trade statistics from the Finnish Forest Industries Federation. However, compared to the previous year, the volumes stayed below the level in October 2018. On average, the volume in October increased by over 20% in sawlogs and about 15% in pulpwood with the total volume pointing up by 18% from September. All individual grades showed increases between 10% and 30%. Comparing the volume to the number a year ago, the total decrease was almost 40%. Year-on-year, pulpwood volumes showed a decrease of 30% but sawlogs a decrease of over 45%. Here all individual grades showed decreases around 45% in logs and about 15-35% in pulpwood. In October, the price data kept the PIX Softwood Sawlogs Finland index on a slide downwards, as it declined by 94 cents, or by 1.64%, to 56.53 EUR/m³. The PIX Birch Sawlogs Finland index value decreased by 72 cents, or by the same 1.64%, landing at 43.13 EUR/m³. The PIX Pulpwood Finland benchmark value by 35 cents, corresponding to 1.98%, with the index closing at 17.31 EUR/m³.

The Finnish sawn softwood timber export prices seem to have been impacted by the increased competition in the export markets. Most of the price quotes delivered to us both for pine and spruce were showing downslide, with a few exceptions pointing upwards. Based on October data, the PIX Sawn Timber Pine FAS Finland index turned its course back down, and weakened significantly, by 5.86 euros, corresponding to 3.37%, to 168.16 EUR/m³. The PIX Sawn Timber Spruce FAS Finland benchmark plummeted almost similarly, by 5.87 euros, or by 3.20%, to 177.75 EUR/m³.

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.