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– Price cuts that have surfaced on Central European OSB markets since June, especially for large orders and a few building projects, became much larger in recent weeks and now affect the overall price situation, as well. Prices have dropped by an average of around €10-15/m³ since the start of the second quarter, marking the first time in a while that prices have fallen in a year-on-year comparison. OSB prices had risen almost without interruption over the past two years, apart from brief dips in December 2010 and January 2011. Prices were always significantly higher when compared with the same time one year earlier. Growth rates of more than 30% surfaced in the second and third quarters of 2010. At that time, OSB manufacturers instituted several mark-ups in a row within a short period of time. The upturn, which only took a quick breather at the turn of the year, ground to a halt in the second quarter. Firstly, higher prices announced by several Central European OSB manufacturers for May did not take full effect. Then mark-ups proposed by a few suppliers for June or July were cancelled amid an unexpectedly strong slump in demand. At the same time, insiders had to backtrack on price increases that they had already implemented. A growing number of price cuts then ensued. A few manufacturers are still undercutting the resulting average prices, as they did in June and July. However, a clear pricing strategy is hardly discernible for these low prices, which go as low as €250/m³ for sharp-edged OSB/3 and €260/m³ for the same products in a tongue and groove version. These prices are also sometimes available for small batches, too, although suppliers are still sticking to higher prices for large contracts.
OSB prices were adversely affected in July by the aggressive price approach taken by a few DIY store chains that slashed their OSB prices for both regular products and promotions. DIY stores’ lowest sales prices were sometimes much lower than merchants’ buying-prices, triggering a negative reaction from this corner. A variety of OSB producers said that specialist merchants had complained to their suppliers in the strongest terms about DIY stores’ low prices, above all in the second half of July. Producers had repeatedly made it clear that these prices were much lower than those negotiated between suppliers and DIY chains. What is more, several manufacturers noted that the OSB sold in DIY store promotions were not comparable with products sold by specialist merchants, at least in terms of its technical properties. The differences in quality had recently tended to widen.
The situation now seems to have calmed down a little again. The rock-bottom price promotions have now ended and were not extended, notably the promotions run by Bauhaus GmbH & Co. KG, based in Mannheim. This company had advertised a price of €2.99/m² including VAT or €209/m³ plus VAT in a promotion for 12mm OSB flooring in sizes of 2,050/1,830 x 675mm when at least three pallets were purchased. This deal ran from 18 to 30 July. The firm offered a price of €265/m³ plus VAT for 15mm OSB. Cubic metre prices for 18mm and 22mm OSB stood at €280/m³ and €250/m³ respectively. Bauhaus’s next advertisement running from 1 to 27 August did not list 12mm OSB flooring. The current promotion features prices of €5.35/m² for 15mm, €6.55/m² for 18mm and €7.90/m² including VAT when buying at least three pallets. When converted into cubic metres, all three types are priced at €300 to €305/m³ plus VAT. On the other hand, Hornbach Baumarkt AG, based in Bornheim, Germany, has maintained its relatively cheap prices for regular OSB products. 12mm unpolished OSB/3 flooring in sizes of 2,050 x 675mm fetches €3.60/m² including VAT or €252/m³ plus VAT for full pallets. 15mm OSB costs €290/m³ plus VAT, 18mm €289/m³ and 22mm €286/m³.
The slight decline in OSB prices in recent weeks has been accompanied by a reduction in surcharges for tongue and groove products. A small number of producers that had raised these surcharges to €18/m³ in some cases over recent months scaled them back again to €15/m³ during August at the latest. Other businesses have now lowered their tongue and groove surcharges to below €15/m³ again, with sometimes amounts as small as just €10/m³ reported.
OSB prices started to fall earlier in a number of export markets. Central European nations have been affected more and more since June. This turn of events is linked to the slump in demand for OSB seen in German-speaking countries and in a few neighbouring Eastern European nations since the start of May. This cooling in demand intensified in June, July and in the first half of August. A few OSB producers said that incoming orders had bounced back slightly since the middle of August in regions where the holidays have already ended. Nonetheless, OSB deliveries continue to fall short of expectations and are lower than in the first half. Manufacturers are thus available to deliver at short notice across the board. Echoing the trend in June and July, producers are modifying their output by bringing forward or extending maintenance stoppages and by slowing down their machines. Larger market-related stoppages have not taken place up until now. Instead, OSB producers are trying to export larger quantities, as in previous months, but continue to battle weak demand and thus mounting competition in these markets, too.
31.08.2011
Roundwood/Sawnwood
- Prices for eastern Siberian larch lumber remain largely stable in August despite holiday season
- 10 % reduction registered in Russian lumber exports
- Felling in Russia in July 2011 lower than in June
- Northwest Russian spruce lumber continues to lose market shares within Central Europe
- Latvian roundwood exports increased by as much as 26.1%
- Felling practically no longer hampered by forest fires
- Finland: Growth recorded in softwood lumber output until June
- United Business Media takes over Ecobuild
- Finland: Log deliveries still below last year‘s level
- Softwood lumber shipments down in North America in the second quarter
- Further growth in softwood lumber output until March
- Brisk demand for logs keeping price situation largely stable in Austria
- Hardwood lumber markets in UNECE revived slightly in 2010
- Lumber exports recovered in second quarter 2011
- Structural panels production declined again in Q2
Wood products
Wood-based panels
- Latvian plywood exports still higher than this time in 2010
- Demand for radiata pine plywood bounces back slightly after summer holidays end
- FFIF: Finnish plywood output grew again
- North American OSB manufacturers enjoy significant increase in exports
- North American composite panels producers‘ capacity utilisation rates stay low
- Slowdown in deliveries continued in second quarter
- GreCon wood-based panels seminar in Hanover
- Demand for MDF/HDF has undergone slight post-holiday revival since mid-August
- IHD Dresden holding ninth wood-based panels colloquium
- Summer reductions push OSB prices below last year‘s level again
- Slump in German particleboard exports persists
Furniture
- Demand for bathroom furniture remained brisk in July/August
- Fittings manufacturers anticipate possible renewed downturn in export markets
- VdDK members‘ order value up 5% in first half-year 2011
- Kitchen furniture industry sales 6% up on last year until June
Building products
Construction
- Housing construction again shows satisfactory trend
- Japan: Residential building increases by 5.8 % in June
Trade
Companies
- Lammhults: Office furniture segment improves turnover
- Slovenian furniture producer Javor Pohištvo bankrupt
- Javor Group: Another subsidiary files for bankruptcy
- Alno granted initial loan of €3m by Müller‘s Comco
- Forte enjoys strong growth in Q1 revenues and profits
- Eggerath: Business operations continue with work force of 60
- Kinnarps Deutschland bundles production in Worms
- Looser: Results forecast for 2011 corrected downwards
- Klostermann Küchen still up and running for time being
- Lowe’s: Turnover and result stabilising again
- Home Depot recovers again in the second quarter
- BlueLinx: Downward trend continues in Q2
- Temple-Inland: Timber business continues to operate at a loss
- IP: Take-over offer now extended until September
- Metsäliitto: Paper activities impose a strain on result
- Start-up in Braviken imposes strain on Holmen result
- Kurekss new sawing line starts up in fourth quarter
- Södra: Fire causes stop in production at Mönsterås
- Lafarge divests itself of gypsum operations in Asia
- Delignit: Results back in the black in first half of 2011
- Rougier books slowdown in revenue growth
- Pfleiderer Grajewo improves result again
- Gascogne records increased turnover in the first half year
- Uzin Utz shows further growth in turnover and result
- Roseburg to close two plants in South Carolina
- Resopal improves turnover by 17% in first six months
- Raute back in the black in the second quarter