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Domas Ugianskis, director of prekybos at Gulbel, which is engaged in the retail and wholesale trade of construction, decoration and other goods, told Lietuvos Rytas that he was surprised by the lack of wood since the spring, when it began to be quarantined. According to the interlocutor, wooden deck boards are very popular in their range; its supply is currently stagnant. When there is a greater need, you have to look for more suppliers: rarely does one have enough positions or required quantities.
“The price of wood, depending on the product, has risen around 70% since the beginning of the year. This was due to a shortage of goods on the market.
Customers who have already started construction want to finish it, so they buy goods at current prices. However, we have clients who have stopped planned projects due to price changes and are waiting for more favorable prices, ”said D. Ugianskis.
He predicted that after a while, when demand stabilizes and prices stabilize, they will start to fall, but will not reach the previous level. Nerijus Višinskas, Marketing Director at Makveza, who manages the Moki-veži network at the time, believes that prices will continue to rise somewhat due to a lack of raw materials in local and neighboring markets.
Recently, due to a shortage of raw wood on the market, Makveža has faced a shortage of waste from construction wood products. There is also a regular shortage of imported finish wood. According to N.Višinskas, this situation occurred during the quarantine, when the demand for building products stores increased significantly.
“As a buyer of wood products, we are currently facing problems with the supply of wood products, that is, delivery times have been lengthened, we do not receive all orders from suppliers. During the first half of this year, the purchase prices of the wood products themselves also increased sharply. These were mainly the most circulating products: lumber and coatings, for which manufacturers have to constantly buy raw materials at increasing prices to meet the growing demand, ”said N. Višinskas.
Did you reach the ceiling?
Rolandas Zacharevičius, director of Polywood, a company that makes semi-finished wood products, estimated that the prices of wood raw materials have tripled since the start of the pandemic in Europe. At the moment, it seems that the ceiling has been reached, but, according to the interlocutor, the “market is fine”. The question of whether prices will rise in the short term: now summer, people began to travel more, wood consumption fell.
However, according to R. Zacharevičius, consumption in the industrial market is high and in the United States it is forecast to reach 3.84 percent. Housing construction growth. “The US market directly affects the wood market in Europe. I think that in September, if prices in the US do not rise – and the probability that they will rise to current Europeans – is unlikely – we will be able to speak of a small price drop ”, predicted the interlocutor. .
There is a shortage of raw materials, so prices have risen more, however, according to R. Zacharevičius, prices have reached certain limits: it is difficult for sellers of wood raw materials to ask the customer for higher wages. “This was the case with the Scandinavian suppliers, but many refused to pay more. The online space informs what is happening in the world, what is happening in the region: people are afraid of buying too expensive, so they buy only what is specifically needed ”, commented the director of Polywood.
The market is saturated
Audrius Katauskas, director of Arbena, which manufactures garden houses, expects wood prices, which have now started to stabilize, to fall by 20 to 25 percent in a month or two.
“Apparently, the market was oversaturated, because not everything, in my opinion, was based on demand, it was based on expected demand. There was even panic, so raw materials were bought earlier. Now we have seen life go on the right track, “said A. Katauskas to Lietuvos Rytas.
According to him, the situation in the United States had a very strong impact on the market. Now timber prices have more than doubled from their peak in early May. “The United States is always a few months ahead of us and prices are already stabilizing,” he said.
Latvians buy Lithuanian logs
Arbena’s main raw material, wood, has doubled in price this year compared to last year, but according to A. Katauskas, prices of the products have increased by about 20 percent. The difference must be made up on your own account; otherwise, buyers will postpone shopping.
“There was no artificial price increase in Lithuania without taking raw materials out of warehouses and waiting for even higher prices, but this is obvious from the Belarusian side. This has been seen since August or September last year. Belarusians bring wood to the market when it is profitable for them. Even on auction days, the auction is not announced, there are cases when contracts are canceled that do not benefit them, – said A. Katauskas.
Sorry, but I can’t buy a lot of Lithuanian wood, because Latvians buy logs; they can give priority to true Latvian processors when buying Latvian wood. I don’t know if this is true, but the added value would be higher in any case if the Lithuanian wood remained in Lithuania ”, explained the director of Arbena.
It rose sharply and very quickly.
Raimundas Beinortas, director of the Lithuanian Association of Wood Industry Companies Raimundas Beinortas, also told Lietuvos Rytas about the problems caused by Latvians who discovered the Lithuanian market, which is felt to be lacking.
“If the price of Lithuanian timber were set by the Chicago Board of Trade, we could talk about it, but it isn’t, so the price is determined by other factors,” he says.
For two seasons in a row, the forests of Western and Eastern Europe were affected by a massive invasion of beetles. This led to heavy deforestation, as this was the only way to save them: contaminated wood must be cut down and removed from the forest as soon as possible. “Both last year and last year, almost 80 million tonnes of that wood was launched on the market in Europe for free. cubic meters. As a result, prices have fallen dramatically.
The quarantine was introduced in this context. When companies started working again, the price of wood would basically remain the same, but in Lithuania it rose sharply and very quickly. This happened due to the procedure for the sale of wood from the state forests established by us ”, said the director of the association.
R. Beinort explained that anyone who wants to can attend the semi-annual lumber auctions. Scandinavians, Poles and Chinese participate in them, but lately the Latvians have been aggressive, who, in the words of the interlocutor, used to be incomparably more modest and bought wood from speculators. Now big Latvian companies are flocking to auctions in Lithuania.
“They have created a timber sales system in their country, which no one in Lithuania can explain. No one has experience of buying wood in Latvia: Latvians sell wood only with local delivery. You will ask to sell the wood in Latvia – definitely. it will take it from the Estonian border. We have calculated the price of transport in the old days: when transporting a timber truck from Trakai to Klaipėda, the price per cubic meter increases by LTL 50. Transport increases the price drastically, “he said. the interlocutor.
The price is changed by buying two extremes.
According to him, Latvians buy wood themselves at a competitive price: 70-80 euros per cubic meter. From a local raw material, a large Latvian company is formed by 85-90 percent. your annual portfolio. “Your task is to find the remaining 10 percent somewhere. So when 90 percent. Buy for about 80 conditional euros, those 10 percent. The price is completely irrelevant.
This is how they behaved when they came to our auctions: at the last auction, which took place in May, the most popular raw material, sawn pine logs, raised the price to 125-130 euros, ”said R. Beinort.
Not only that, the Latvians bought almost all the wood, because ours did not offer that price, they put their finger in the wheels and for wood buyers with long-term contracts. For long-term contract holders, the price is adjusted every six months based on semi-annual auctions.
This year, due to the Latvian contract, which has been available for many years, the price of wood becomes 125 euros: all wood purchased by those with long-term contracts must be purchased for 125 euros. When a Latvian buys only 10 percent for that price. wood, this amount melts in your boiler. As we say: one face comes to the auction, buys two poles and influences our large companies, which buy a million cubic meters a year ”, said the director of the association.
Two votes missing
A working group was created in the Government of the last legislature to improve the procedure for the sale of wood from state forests. It turned out that, according to R. Beinort, in absolutely all European countries, except Lithuania, it was made so that the raw material did not leave the state. The French, for example, have sharply raised timber prices. It’s not worth buying for anyone, but the country subsidizes the price of its own wood processors.
The working group drafted a version of the amendments to the Forest Law, which stipulated that the timber buyer had to meet certain criteria, but was two votes short of adopting it, so the draft was returned to the Government for its approval. improvement. A few weeks ago, a group of Seimas members signed a new proposal to amend the Forest Law.
