European softwood logs invade the Chinese; market prices down sharply

European beetle logs have flooded the Chinese market. In the first ten months of the year, the EU countries exported almost 15 million m3 of spruce logs to China, a 450% rise as compared to the same period of last year.

The top exporting countries are the countries where the bark beetle outbreak hit the most: Poland leads the way with 4.4 million m3 worth of softwood logs, followed by Belgium (4.1 million m3), Germany (2.5 million m3) and Czechia (1.8 million m3).

In Europe, Germany has the most damaged timber so far, the Czech Republic’s spruce forest are highly stressed and there is the danger of losing up to 80% of its spruce trees over time – trends that are going to create a huge local timber shortage when the beetle epidemic is played out.

With an oversupply of sawlogs in Central Europe, dead and damaged logs are being offered at €40–50/m³/m3 (US$44–55/m³) ex-forest road – almost half of what they were selling for just 18 months ago. For older beetle damaged timber and industrial log grades, the ex-forest prices are even lower.

Current C&F China log prices for European spruce logs have been steadily dropping as the volume increased – they are now down to about €95–96/m³ (US$105/m³) from €117 per/m3 (US$130/m3) in 2019/Q2. Such low log prices coupled with high inventories have started to curtail production in higher cost log exporting regions such as Siberia, the Russian Far East and the B.C. Coast, just to name a few.

Some recent estimates, forecast 100 million m3 of bark beetle infested wood in Europe for 2019, thus this export trend will probably continue at much higher rate.