Central European sawmill industry demands reductions in softwood sawlog prices

On account of the tight profit situation which has prevailed for several months in the Central European sawmill industry, various companies are evidently now no longer willing to continue at the beginning of 2012 to pay the roundwood prices reached by the end of November of in some cases over €100/m3 for the leading range of spruce L 2b B. In current negotiations, various sawmilling companies are demanding price reductions of at least €5-6/m3. Those demands are already being reinforced by production cutbacks or by extensive shutdowns planned for the turn of the year and the consequent lower roundwood demand by the mills. In first reactions, forest owners rejected such demands as incompatible with the state of the market and referred to continuing high demand and the imbalance between supply and demand. Most preliminary-contract negotiations for deliveries in the first quarter of 2012 are to be concluded by mid December. Because of the diverging points of view, market participants are reckoning with difficult negotiations. However, in Central Europe, the signs are multiplying of at least a temporary halt to price rises for sawable softwood roundwood or even of a slight decline in prices.