The situation on the lumber market in 2021 was dictated by price rise, reaching historically the highest prices for pine and spruce trees. Considering the geopolitical situation as of the start of the year, the price rise will continue because anti-Russian sanctions play a major role, according to experts of wood auction system E-silva in Latvia.
Last year the demand for mortgage loans increased in the EU. This rapidly promoted construction of new buildings. Construction of wooden buildings is characteristic for Europe and the US, especially when it comes to panel houses, the construction of which uses pine and spruce wood. As a result, conifer lumber experienced record high demand and price rise in 2021. Covid-19 pandemic also promoted interior home repairs. Demand for Latvian lumber directly depends from US, British and European markets. Fluctuations on these markets also affects demand and prices of lumber in Latvia, experts say.
After the price rise observed in summer, the prices of beams from coniferous lumber dropped significantly in Q3 2021. Thanks to favourable prices in Q2 forest owners and the biggest market players were interested in selling as much as possible. This meant plenty of work for sawmills. Scandinavian countries sent their lumber to Latvia for processing. All of this resulted in a surplus.
At the end of 2021 the price of coniferous sawlogs was 4% above the price level observed last summer. Although the price of thick sawlogs did drop (the highest price rise in summer 2021 resulted in the price of thick pine sawlogs reaching 122 EUR/m3), after the price drop in Q3 and Q4 of 2021 it was 102 EUR/m3. For other coniferous lumber products the price showed a linear growth rate, maintaining the sawlog price rise.
Last year’s paper pulp price change trend is positive. The price rise observed at the end of the year was due to an increase in demand for pulp and wood energy. Nevertheless, the price per m3 has increased gradually across the whole year. Compared to Q1 2021 the price of paper pulp increased 44.7% in Q4 2021 (from 40 EUR/m3 to 58 EUR/m3).
In Q2 2021 the price gradually stabilized and cost about 106 EUR/m3 by the end of Q3, which is nearly 29.3% higher when compared to the start of January 2021.
Experts: lumber price growth greatly affected by anti-Russian sanctions
