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Wood Products Prices in Europe

01 – 15th May 2018


Report from Europe  

  Protests in Europe against oak exports
One prized timber has been the object of protests on the
Champs Élys¨¦es, a free trade legal challenge by the EU to
the Ukraine and at a recent European conference in
London. That commodity is European oak!

The species must currently rank as one of the most sought
after hardwoods. Alongside US white oak, it has become
the European consumers¡¯ timber of choice for furniture,
flooring and joinery.

In fact, demand is such that one of the EU¡¯s fastest
growing retailers, solid oak furniture specialists and now
USA-based ¡®Oak Furniture Land¡¯, is predicting its sales
will hit £1 billion in five years, up from £300 million in

Europe¡¯s oak is also in strong demand elsewhere,
principally in Asia and most notably China. Much of the
material is still processed by Asian producers, particularly
in Vietnam and China, and made into manufactured
product for export to Europe, the US and elsewhere.

But increasing volumes are used for goods destined for
expanding domestic Asian consumption, led once more by
the Chinese market.

China has been importing more European oak lumber, but
its imports of logs have been growing faster, to the point it
is seriously concerning the European processing sector,
fearing for its raw material supply. The result has been
calls for export controls, notably in the sawmillers¡¯
protests in Paris.

France is Europe¡¯s biggest oak source and believes it has
been most affected by the Asian log drain. Some say it
even threatens to reduce the scale of French sawmilling,
with the repercussions for downstream businesses and

French mills acknowledged steps have been taken to
alleviate the situation, including a government measure
stipulating that 300,000 cu.m of timber from state forests
had to be further processed in the EU. Some companies
were reported to be bypassing this by trucking logs to
Belgium for simple squaring for export to China and
elsewhere, but the policy is thought to have had some

New phytosanitary regulations, curbing timber treatment
in the forest and stipulating it is undertaken in notified
premises was also said to have put an added administrative
brake on log exports.

At the same time the French have been actively marketing
their oak lumber in Asia, with some success.

¡°We¡¯re selling more sawn timber to China and at least 10
other Asian countries, with fastest growth now in Vietnam
and India,¡± said Florence Perrucaud, export manager at
sawmillers Ducerf. Guillaume Maniere, export sales
manager at Monniot reported a similar experience. ¡°Asian
flooring and furniture producers are now our main
industrial qualities customer and we¡¯re supplying them
beams for lamellas and cutting to their specified

But despite rising export demand for sawnwood and the
log export restraints, French mills say the flow out of the
country remains considerable and there is currently no
reason to think it won¡¯t rise further.

Adding to the pressure on European oak sawmills and
timber processors is the unprocessed timber export ban by
Ukraine. This was imposed for a decade in 2015 on all
timber except pine, then extended to the latter in 2017.

A European parliament study alleges the measure was
introduced to support Ukrainian timber processing and
manufacturing sectors and was thus contrary to trade
agreements. So far, however, Ukraine has resisted EU
demands to have the ban lifted.

EU countries hit hardest by the Ukrainian ban, says the
European Organisation of Sawmill Industries (www.eosoes.
eu), are Romania, Slovakia, Poland and Austria, which
between them in 2014 imported 1.4 million cu.m of
Ukrainian roundwood.

At the same time, the European industry has faced
temporary oak log and green lumber transit and export
controls in Croatia. These were introduced last summer,
ostensibly to prevent the spread of oak lace beetle
(corythucha arcuata).

Raw timber was estimated to have accounted for a third of
Croatia¡¯s total €1.09 billion wood exports in 2016 and the
export ban is reported to have left sawmill customers in
the rest of the EU, notably Italy, short of material. It is also
said to be causing green timber bottlenecks as, despite
increased investment in kilning, including from Italian
sawmillers, the Croatian industry does not have enough
drying capacity to handle previously exported material.

Increasing wider EU concern about Croatia¡¯s move have
been reports in its press that the ban will assist its domestic
processing and manufacturing sectors by reducing
competition for raw materials, implying this was part of
the original motivation.

The result of this combination of factors has been oak
price rises, especially for logs.

¡°While lumber has risen 20% in three years, log prices
have increased by 40%,¡± said export sales manager Marie-
Th¨¦r¨¨se Carrey of French hardwood mill Euroch¨ºne.

And the upward trend looks set to continue, according to
one EU trader-importer. ¡°We¡¯re currently seeing European
oak rising around 5% every six months, with 26mm-40mm
dimensions under particular pressure¡± he said.

All these issues were addressed at the European Oak
Conference, hosted in London by the UK Timber Trade
Federation on 19 April, and a capacity audience of 110-
plus delegates from the UK and the rest of Europe
underlined the intense trade interest.

The opening address came from Silvia Melegari, Secretary
General of the EOS, whose 35,000-sawmill membership in
13 countries represents 77% of all European sawn wood
output. She underlined the seriousness of the raw materials
situation facing EOS members, particularly due to Chinese

Various ingredients had come together recently, she
maintained, to heighten China¡¯s appetite for roundwood
hardwood of all types (with its imports jumping from 14.3
million tonnes in 2016 to 16.5 million tonnes in 2017), but
particularly oak. Its domestic market for timber goods has
been expanding rapidly. At the same time, it has further
reduced its own natural forest harvest and cut VAT on log

¡°We¡¯ve seen overall European sawn oak exports to China
rise 34% in the last seven years, but log exports have
increased 244% in the same period,¡± said Ms Melegari.
¡°And in 2010 63% of oak roundwood exported from EU
countries was consumed in other EU countries. In 2017
50% was exported outside the EU, with 42% destined for

She did not draw a direct connection with roundwood
exports, but also stated that 30% of French, Belgian and
German hardwood sawmills had closed in the last 10

While the EOS acknowledges it is difficult to dissuade
forest owners from selling logs to the highest bidder, it is
actively lobbying national and EU governments to support
the European hardwood sawmill sector. A group of MEPs
had written a letter to European Commission President
Jean-Claude Juncker on the topic and urged an EU action
plan for the industry.

An appeal has also been made via the European Economic
and Social Committee requesting measures ¡°to ensure
wood supply from the region¡¯s forests is sufficient to
satisfy local industry needs on a sustainable basis,¡±.

The EU, said Ms Melegari, was also continuing to pursue
legal proceedings over its decade-long log export ban
against Ukraine, where oak comprises 28% of the forest,
second only to pine at 35%. Partly as a response to the
measure it has now blocked payment of the €600 million
final tranche of a package of ¡®macro financial assistance¡¯.

However, speaking at the European Oak Conference on
behalf of the Ukrainian Association of Wood Processors,
trade journalist Vasyl Masyuk said the export ban was
unlikely to be dropped. It was popular in his country¡¯s
timber and timber using sectors and there were concerns
that without it, Ukraine risked becoming primarily a raw
materials supplier to the EU and Asia.

This echoed reported comments from Liudmyla Hurina of
the same organisation. ¡°Since the ban, Ukraine¡¯s wood
processing figures have grown by 15% and furniture
companies¡¯ by 12%, while the export of processed lumber
has risen by 12%,¡± she said.

Other EU producers also gave their market perspective at
the conference. Rafał Gruszczy¨½ski of the Polish
Economic Chamber of Commerce said his country¡¯s mills,
previously key importers of Ukrainian oak logs, were hit
by high raw material prices and shortages.

He added, however, that the complexity of Poland¡¯s log
auction system was likely a deterrent to export buyers,
notably in China. Polish sawn oak exports last year were
around 85,000m3, of which 29% each went to Slovakia
and Austria, 18% to Germany and 1% to China.

Jean-François Guilbert, Managing Director of the French
Timber promotional body, said 2017 French sawn oak
output had been relatively strong at 615,000m3, with
buoyant domestic demand from the railway, flooring,
joinery, furniture and barrel industries.

However, according to Mr Guilbert, rising oak lumber
prices were not offsetting more sharply increasing raw
materials costs and oak log exports to China remained a
worry. In 2007 they comprised just 7% of the French
harvest, he said. Last year they hit 23%.

Some traders report a degree of European market
migration to other hardwood species due to European oak
price and supply pressure. These include European and
American ash, and US white oak, although the latter is
also characterised by growing global demand, including of
course from China, and upward price pressure.

In what one trader described as ¡®the oak obsessed
European market¡¯, the American Hardwood Export
Council (AHEC) also sees opportunities for the US red
variety of the species. This has not been anything like as
popular with European specifiers as US white or European
oak, but there¡¯s belief current market pressures could
change that.

EU hardwood log export hike continues
In 2017, total EU hardwood log exports were 2.8 million
tonnes, up 15% on 2016 and 53% on 2012.

In 2004, the EU exported just 7000 tonnes of hardwood
logs to Vietnam. By 2017 that figure had risen to 377,000
tonnes. The growth in imports continued to accelerate
throughout the period, with the biggest jump of 577%
coming in the five years from 2012.

While it may have outstripped it in terms of growth rate,
however, Vietnam still has some way to go to catch up
with China as the EU¡¯s biggest hardwood log customer.
Over the 13-year period to 2017, EU exports to China
increased from 365,000 tonnes to 1.94 million, with
growth in the last five years hitting 95%.

Last year for the first time India overtook Turkey to
become the third largest EU hardwood log buyer, even
though exports to India fell 37.5% from 2016 to 129,000
tonnes. (Chart 1).

In terms of species, beech was the EU¡¯s biggest hardwood
log export last year, with a total of 799,000 tonnes. But
oak continued to catch up rapidly with log exports rising a
further 46% to reach 728,000 tonnes.

The third biggest log export species was birch, although its
2017 total was down 20% at 500,000 tonnes.

Total EU sawn hardwood exports were 1.9 million in
2017, a rise of 7.4% on 2016 and 31% on 2012.

China took top spot in terms of EU sawn hardwood
exports in 2017, with its total rising 119% since 2012 and
35.4% last year to reach 645,000 tonnes.

Egypt remained the second biggest market for EU sawn
hardwood outside the region, with a total of 460,000
tonnes, but Vietnam again saw fastest growth, with EU
exports to the country rising 379% in the five years to
2017 to 113,000 tonnes. (Chart 2).

Beech remained by far the EU¡¯s biggest sawn hardwood
export, and the total grew another 12.7% to 1.36 million
tonnes. Oak followed someway behind at 256,000 tonnes,
but this represents 93.1% growth since 2012.

Ash was third biggest sawn export species in 2017, at
50,000 tonnes, and the EU¡¯s fourth largest export category
was sawn tropical hardwood. The latter grew 10% to
24,000 tonnes, but this was down 23.2% on five years ago.
The EU¡¯s exports of sawn tropical hardwood are mainly
destined for neighbouring countries such as Switzerland,
Norway and Bosnia, but smaller amounts go further afield,
including to the USA, Japan, China and UAE.

ITTO-IMM and ATIBT to hold joint conference during

The ITTO/FLEGT Independent Market Monitor (IMM) is
to hold a second EU Trade Consultation jointly with an
ATIBT conference on 31 May during the Carrefour du
Bois trade show in Nantes, France.

ATIBT will open the conference with a series of short
presentations covering the organisation¡¯s mission as well
as some of its most recent activities, including the Lesser
Known Species (LKTS) project and the Fair and Precious
tropical timber promotion programme.

IMM will then speak about FLEGT licensing and
sustainable forest management in Indonesia, trends in EU
tropical timber trade, results from IMM¡¯s on-going EU
furniture sector scoping study and FLEGT recognition in
European public procurement.

The afternoon will be dedicated to workshops on the
following topics:
Purchase dynamics for companies sourcing from
Indonesia, including knowledge about legality
and sustainability standards
FLEGT impacts on Central African producing
Market trends for tropical timber in Europe

The event is free but pre-registration is required. Further
details, including the agenda and registration form are
available at:


LM       Loyale Merchant, a grade of log parcel  Cu.m         Cubic Metre
QS        Qualite Superieure    Koku         0.278 Cu.m or 120BF
CI          Choix Industriel                                                       FFR           French Franc
CE         Choix Economique                                                        SQ              Sawmill Quality
CS         Choix Supplimentaire      SSQ            Select Sawmill Quality
FOB      Free-on-Board     FAS            Sawnwood Grade First and
KD        Kiln Dry                               Second 
AD        Air Dry        WBP           Water and Boil Proof
Boule    A Log Sawn Through and Through MR              Moisture Resistant
              the boards from one log are bundled                      pc         per piece      
              together                      ea                each      
BB/CC  Grade B faced and Grade C backed MBF           1000 Board Feet          
              Plywood   MDF           Medium Density Fibreboard
BF        Board Foot F.CFA         CFA Franc        
Sq.Ft     Square Foot              Price has moved up or down

Source:ITTO'  Tropical Timber Market Report

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