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January 17, 2020

Deteriorating market and supply challenges for European hardwood

Deteriorating market and supply challenges for European hardwood

The market situation for German hardwoods was described at IHC by Steffen Rathke, Vice President of DeSH who said that both domestic and export market demand deteriorated in the second half of 2019, partly a response to responding to mounting economic uncertainty in Europe and China, the main export market.

Mr. Rathke also highlighted that raw material availability is becoming more challenging in the hardwood sector with pests and drought having an increasing impact. Mills are having to cut back on production of beech because of severe damage to logs during lengthy periods of drought in recent years. Although the freshly harvested beech logs often appear unblemished on the outside, the timber contains a lot of defect and the yield of higher-grade lumber is negligible.

Referring to a previous period when the export market for European beech logs was severely undermined by shipment of a lot of low quality (in this instance stormthrown) beech, Mr. Rathke said that “it is has taken 15 years to get the beech market back in China, but now again we are seeing more of these lower quality being sent to China and we could lose this market again”.

Mr. Rathke also expressed concern about the possibility of a similar fate for oak with a rising incidence of worm holes, which cannot be detected when logs are inspected in the forest, also caused by drier conditions.

“Our trees are under stress”, concluded Mr Rathke, “the industry needs to do more to help forest owners, to bring out the dead wood out, to replant and re-establish the forest resource”.

A similar narrative emerged from a review of the wider market for European hardwoods delivered to IHC by Maria Kiefer-Polz, EOS Vice President for Hardwood.

She emphasised the rising impact of drought, pest and disease increasing hardwood forest mortality and leading to rising proportion of logs of lower grade being placed on market and contributing in turn to a significant fall in prices for chips, sawdust and bark, undermining the profitability of hardwood sawmills.

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