In the past few weeks, industry and media reports about warned about a lack of lumber in Germany.
The German Sawmill and Wood Industry Association (DeSH) sees the market as being influenced by ”special effects” and appeals not to fuel the dynamism any further, because after all, building material prices are generally rising and the increase in production clearly exceeds that of exports.
“Due to the special effects of the corona pandemic and upheavals on the world markets, we are currently experiencing highly dynamic events on the wood market, which are being further fueled by the current debate. The current figures show, however, that the production of wood products also increased significantly in February with an increase of more than 11%, while exports remained almost unchanged at the previous year’s level with an increase of 0.7%. Regardless of the market figures, there is still extreme uncertainty in the market, “explains Jörn Kimmich, President of the German Sawmill and Wood Industry Association (DeSH).
“We are of course delighted with the demand for wood. However, the sharp price increases for all construction-related products such as steel, concrete and cement as well as aggregates and binding materials show that the boom is affecting almost all materials, “explains Kimmich.
The increased demand for wood materials in North America can currently only be supplied to a limited extent from the local forests due to beetle damage and fires. As wood structures are increasingly being used in China and Russia has imposed an export ban on logs, the DeSH assumes that global demand will exceed global production in 2021. Contrary to what was assumed, however, the market figures from February 2021 do not indicate a significant increase in German export activities.
“Strengthening timber construction in Germany has always been the goal of the sawmill and wood industry and will remain so in the future. However, global political developments lead to strong regional shifts within a relatively constant export volume. In this case from China to the USA and Great Britain, “explains Kimmich. The export of softwood sawn timber grew from 9.3 to 9.8 million m3 between 2019 and 2020. This volume is now at the level of the years 2006 to 2008. The German sawmill industry started the year 2021 with a slight decline in exports in January and a marginal increase of 0.7% in February.
Overall, softwood timber production in Germany reached a new record last year. Over 25 million m3 (+ 8%) were produced in the German sawmills. The German sawmill industry has been expanding its production capacities considerably for years in order to process damaged wood as quickly and as efficiently as possible. Between 2016 and 2020 alone, the processing volumes increased by 1/5 from 21 million m3 to more than 25 million m3. Additional expansions are planned for the next few years.
Due to inadequate storage, transport and logistics options, German companies are limited in their processing of damaged wood, and some products also require fresh wood to be produced. Some companies are also unsettled about investments because of the restrictions imposed by the Forest Damage Compensation Act, which significantly limits the availability of spruce wood this year. The industry depends on a reliable and permanent supply of roundwood from Germany.
“Fluctuations in demand and prices, as we are currently experiencing, will probably be more frequent in the future. This means that wood joins other building products such as steel, cement or gravel, which have been volatile for a long time, “says Kimmich. Since the price of wood has remained almost unchanged over the past 30 years, there is understandably extreme uncertainty among woodworkers and craftsmen. However, building up stocks and multiple orders could intensify the dynamics and thus lead to even longer delivery times. It is therefore important that the entire industry adjusts to these new developments,” Kimmich concluded.
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