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EOS forecasting minor reduction in softwood lumber production volume in 2012

02.07.2012 − 

A limited availability of logs, high log purchase prices, and negative effects on sales of softwood lumber by the general economic and financial crisis have been hampering the business activity of softwood lumber producers in the European Organisation of the Sawmill Industry (EOS) for a number of months now. Participants at this year’s EOS general meeting in Riga believe softwood lumber-producing businesses currently find themselves facing very high pressure on their earnings, which, according to participants, is far greater than that experienced in the crisis year of 2008. Owing to the discrepancy between raw-material procurement, production, and logistics costs on the one hand and the selling prices currently obtainable for softwood lumber on the sales markets on the other, for quite some time now the majority of the companies have no longer been able to generate a positive contribution margin. In view of this and in order to achieve an as good a balance as possible in supply and demand on the softwood lumber markets in the short term, central European sawmilling companies in particular have announced their intention to reduce their lumber output. However, as yet there are no signs of any uniform approach by all producer countries within EOS.

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