The wood market is going crazy

The prices for both construction timber and raw timber have increased significantly internationally. The sawmills are working at their capacity limit. And an ever larger proportion of production is being exported.

Timber harvest in the Rostock Heath

When the complaints about expensive and scarce construction timber continue, the Federal Statistical Office reported a “timber balance” on Monday, which does not seem to match the shortage reports of the last few weeks. According to figures from the highest statistical authority, there has never been more wood felled in German forests since reunification. Because many trees affected by drought damage and beetle infestation had to be felled, the amount of raw wood increased from 69 million to more than 80 million cubic meters last year. A good half of this harvest can therefore be traced back to damaged wood.

So wood is not scarce. The fact that less and less “construction timber” – beams and battens – arrives at German construction sites is due, on the one hand, to the processing capacities of the sawmills. On the other hand, the prices for both construction timber and raw timber have increased significantly internationally. The sawmills can no longer process. And an ever larger proportion of their production is being exported.

The Federal Statistical Office describes sawing, planing and impregnating factories as benefiting from this development. The industry turnover reached a record level in 2020. The increase in prices, however, has not reached the forest owners. While processed wood became expensive, according to the authorities’ calculations, the prices for raw wood were slightly below those of the previous year – compared to 2015 even 27 percent lower.

Every second tribe goes to China

More and more of the wood that cannot be processed has migrated abroad; China in particular has taken advantage of the situation and imported large quantities of logs. Exports of raw wood from Germany have risen by almost 43 percent within a year, every second trunk of which ended up in China. Many forest owners have accepted the cheap prices from China for better or worse. Alternatively, they have to store the already damaged wood in expensive wet storage facilities and hope that prices will rise again.

While raw wood in the forest has to be saved from rotting, construction companies are complaining louder and louder about material shortages. Construction projects are delayed in rows because wood for roof trusses cannot be delivered on time, cost estimates are only sent subject to rising material prices. The Federal Construction Industry Association fears that because of the shortage, regardless of the good order situation, more and more companies will have to register short-time work. Wood and insulation materials for the roof structure “are not available”, as the interest group recently announced succinctly. Pipes for foundations, plastics and copper for cables and foils are also in short supply. There are also bottlenecks in steel construction.

“We have to assume that the supply of materials will unfortunately not normalize in the next few weeks.” Public buyers should refrain from sanctions in the event of construction delays.

While large parts of the unprocessed raw wood migrate to China, ever larger amounts of construction timber go to America, where the proportion of timber construction houses is high. According to industry information, the Americans have now paid more than three times as much for construction timber. In a study, DZ Bank names the immense forest fires as one of the reasons for the increased demand for imports. In addition, the mountain pine beetle infested forests in the supplier country Canada. The analysts assume that the rise in wood prices will cause construction costs in Germany to rise further. Due to the low interest rates, however, no effects on the demand for residential construction are to be expected for the time being.