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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.

Dec 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 – One of the planned greenfield pulp mill projects in Finland, Finnpulp in Kuopio, has encountered major setback leading to a cancellation of the project, as the Supreme Administrative Court has ruled that the mill cannot get an environmental permit. According to the court, the impact of the mill on the lake Kallavesi could be too significant. Meanwhile, Metsä Group’s large sawmill project in Rauma has received both building and environmental permits. The final investment decision for the mill with an annual capacity of 750,000 m³ is planned to be made in early 2020. The sawmill is expected to use about 1.5 Mm³ of logs annually.

The prices of sawlogs have been decreasing globally, Wood Resources International reported. Especially prices in Europe have been deteriorating along with oversupply of logs in the Central European market. Softwood pulpwood prices have either remained stable or decreased. The greatest decreases have been in Austria, Germany and Sweden. Meanwhile in Finland, the imports of wood have increased by 5% to 8.67 Mm³ in Q1-Q3/2019, as reported by Luke. Almost 60% of the imports were pulpwood, woodchips covering over 30%.

The roundwood trading volumes decreased compared to the previous month and to November 2018, according to the wood trade statistics from the Finnish Forest Industries Federation. On average, the volume in November decreased by almost 25% in sawlogs and 13% in pulpwood with the total volume pointing down by 17% from October. All individual grades showed decreases around 20%, except pine pulpwood decreasing only by 6%. Comparing the volume to the number a year ago, the total decrease was 50%. Year-on-year, pulpwood volumes showed a decrease of 40% and sawlogs a decrease of over 60%. Here, individual grades showed decreases of around 30-40% in pulpwood and about 55-65% in sawlogs. In November, the price data kept the PIX Softwood Sawlogs Finland index on a slide downwards, as it declined by 85 cents, or by 1.50%, to 55.68 EUR/m³. The PIX Birch Sawlogs Finland index value decreased by 53 cents, or by 1.23%, landing at 42.60 EUR/m³. The PIX Pulpwood Finland benchmark value slid down by 63 cents, corresponding to 3.64%, with the index closing at 16.68 EUR/m³. The previous time when the our PIX pulpwood index has been on this low level was in March 2018, while the PIX softwood sawlog index was on this level in February 2017.

The Finnish sawn softwood timber export market is still heavily impacted by the central European log and sawn timber oversupply. Most of the price quotes delivered to us both for pine and spruce showed negative change, but there were now some more prices which went upwards, compared to the previous month. Based on November data, the PIX Sawn Timber Pine FAS Finland index kept heading down, and weakened by 3.25 euros, corresponding to 1.93%, to 164.91 EUR/m³. The PIX Sawn Timber Spruce FAS Finland benchmark deteriorated by 2.61 euros, or by 1.47%, to 175.14 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.