France: Can softwood prices be adjusted?

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How far will the softwood prices rise in French forests? Can a significant evolution in timber prices compensate for this increase? These are the kind of questions posed by French sawyers after the auctions campaign 2013-2014.

In recent months, roundwood prices continued to grow steadily and, since early 2013, the average price increase in France's forests stands at around 20%, with differences depending on species and regions.

At the same time, the price of sawnwood only increased, at best, by 5%. 'The flows we were selling at around 185 euros/ per cubic meter one year ago, are now trading at just above 195 euros/cbm,' says Jean-Philippe Descourvières, a sawyer from Doubs region. Given the sawing performance, it would take at least a 10% increase on boards to offset the high cost of materials, where all professionals in the industry report difficulties. Moreover, as a proof of the scarcity of wood, it seems that German sawyers are now crossing the Rhine and make their supplies from Franche-Comté, while those from Savoy region make their purchases from Jura.

With the summer construction season approaching, how will the sawnwood prices evolve in the upcoming months? 'Traders are in the same situation as we, confronting with the weakness of the construction market and its lack of visibility. Orders arrive at the last moment for an almost immediat delivery', says one sawyer. In fact, the last issued building activity figures in France, give no hope for a clear recovery in the short term. If the relative share of wood use in the construction of individual houses continues to make progress (12% in 2011, against 11,3% in 2011), the number of wooden houses projects declined (15,685 wooden houses built in 2011; 14,320 built in 2012). In a sluggish overall market, the downward trend has not varied over 2013 and seems to continue in 2014: -4.3% housing projects in Q1/2014 as compared to Q4/2013.

'For companies in the wood construction sector, this soft market will not continue too long', says Christian Piquet, President of France Bois Régions federation. Mr. Piquet delivers an optimistic message: 'We must not relax our efforts. There is only one solution: take market share from the competition!'. With a pending improved French market, the immediate salvation could come from abroad. If the major European exporters are moving again to the United States to supply the rising housing market, this could free up French sawyers who could then hope to pass to price increases.

Also read: France: softwood prices still rising

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