Demand for sawmill residues in Germany is more and more exceeding supply resulting in prices moving upwards in fourth quarter contracts.
Contrary to initial expectations, Central European sawmill residue users encountered another deterioration in the supply situation up to the middle of November. While sawmill operators continued to cut relatively limited amounts in the past six weeks, wood-based panels and, in particular, pellet manufacturers were still producing at high levels.
Sawmill residue converters in Germany were unable to build up winter inventories by the middle of November due to tight supply and high consumption. As a result, a few converters do not have enough raw materials, from the current standpoint, to offset sawmills’ scheduled stoppages lasting several weeks over Christmas and the New Year and the associated reduction in sawmill residue arisings.
Negotiations about fourth-quarter sawmill residue deliveries, which began in late September and early October and initially proved challenging, picked up steam very quickly due to altered framework conditions. As a result, suppliers were able to achieve their goal of instituting substantial mark-ups in the contracts that have now been inked. Prices climbed especially in the case of sawdust, while the increase in prices for MDF and pulp woodchips was somewhat smaller.
⇒ This article is an excerpt from EUWID's report on the sawmill residues market. The EUWID Price Watch sawmill residues for November will be published in EUWID Pulp and Paper no. 47 on 21 November.
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