Softwood prices reach unprecedented highs in France

Sawmill owners and loggers in France have never seen this! The prices of fir logs and especially those of spruces have just reached unprecedented highs in the east of France. In the Vosges massif, which has been badly affected by the bark beetle crisis, recent spring sales have ended in a big fight between buyers to obtain raw material.

In lack of wood, Alsatian and Vosges sawmill owners are now investing in the Jura massif. This phenomenon was confirmed at the end of May 2022 at the auction in Champagnole (Jura) where the ONF presented an important catalog totaling some 120,000 m3 of standing timber (2/3 in fir, 1/4 in spruce, the rest in douglas). “We have witnessed a historic sale by the scale of the rise in prices and by a demand which has taken away all the supply offered” , comments Jean-Luc Felder, the softwood sales manager at France’s Forest Office (ONF) from Doubs.

The symbolic bar of 100 euros per m3 under bark and standing has now been crossed for a few batches of fir and for many items of spruce. Spruces, which were worth an average of €65/m3 in autumn 2021 are now trading at €92/m3. The six-month increase therefore exceeds 40%.

As for fir trees, the trend is hardly different. The logs which were sold on average and standing for 63 euros/m3 in September 2021, are now sold at 80 €/m3.

This surge in log prices comes at a time when the lumber market is running out of steam. Delivery times, which were still 10 to 12 weeks at the end of last year, fell to 4 weeks at the beginning of June. The main reason for this recent fall in orders is because inventories are piling up.

In fact, individuals have virtually stopped their purchases (lumber prices too high, wages disconnected from inflation, very strong DIY-renovation activity in 2021, etc.).

In this context, should we expect a drop in log prices soon? Not sure because the shortage of wood resulting from the bark beetle crisis could contribute to maintaining forest purchase prices at very high levels.

On the other hand, if lumber prices fall below 280-300 euros/m3, some processors believe that the profitability of their operations will be affected. The evolution of US demand, inflation in Europe, French construction, the war in Ukraine which is dragging on, so many elements out of control that can badly and quickly modify market conditions in France.

Softwood prices are soaring in France
(Price in euros/m3 standing and under bark at recent auctions in Franche-Comté)