German buyers and sellers of sawmill residues at odds in run-up to price negotiations

The German pellet industry is planning to press for marked reductions in sawdust prices, demand for TMP woodchips is exceeding supply.

In Germany, concrete negotiations on sawmill residue deliveries in the second quarter of 2013 were set to commence in mid-March. It has already become clear in initial preliminary talks, however, that suppliers’ and buyers’ notions before the start of the negotiations are much further apart again than they have been in the last two quarters. From today’s standpoint it looks as if all the buyer industries are going to try to exert pressure on prices for sawmill residues and further reduce the prices that still apply. In contrast, the majority of suppliers are going to insist that the level of prices reached in the second quarter be retained until the middle of the year as far as possible. In view of the contract partners’ widely differing points of view, negotiations are expected to take some time.

The central European paper industry’s production activity in the early weeks of this year has been considerably higher than planned in some cases. In recent weeks, the mills’ consumption of TMP woodchips has been correspondingly higher than expected. The high consumption of raw material has meanwhile led to a tense supply situation for some paper manufacturers. Although the threat of bottlenecks has so far been averted by long-distance purchases, procurement costs have continued to rise. Stoppages caused by a shortage of raw materials had been able to be avoided until the beginning of March but if the situation persists for another two or three weeks in its present form, stoppages may well be resorted to over Easter.