The Global Sawlog Prices Index (GSPI), a benchmark for worldwide wood pricing, has dipped about 10% from its all-time high in 2022. According to Resource Wise data, most countries experienced a drop in prices over the last year. However, some countries have actually seen rising costs in the preceding 12 months. Sources: Timberbiz, Resource Wise
Multiple factors are at play in why we’re seeing these ups and downs. This post will examine a few of the major global forestry regions to better understand why this maybe the case.
Pacific sawmill regions, most notably in British Columbia, have continued feeling the pinch of market shifts. Several mills have already closed, and more pulp mills will likely follow suit in the region.
As explained by Ted Clarke of the Prince Georgia Citizen, BC has seen a series of challenges that many companies could not overcome. A pine beetle infestation devastated BC forestlands and left a huge deficit in available harvests. This led to an excess of mills without enough supply to go around—a big problem for any operation.
Additionally, increasing risks from wildfires have left some investors worried about opening new facilities or even continuing to operate current ones. With 2023’s record-setting wildfire destruction, it’s no surprise most companies would feel that way.
According to Wood Resources International, a Resource Wise company, former PNW operations have shifted gears and moved down to the US south. An ample supply of trees and favourable market conditions make it a highly attractive area to these companies.
The price for sawlogs across the US south saw some slight increases in 2022. By the quarter of 2023, however, they had also fallen around 8% year-over-year. In nominal terms, this amount was the lowest the region has experienced in 25 years.
This price drop extends beyond sawlogs and into processed wood as well. Our data shows SYP KD lumber prices continuing to fall after hitting a 2023 low in August. Since that report, these costs have dropped even more.
Dips in manufacturing and industrial production demand contributed to this drop. Additionally, fears of recession have loomed for several months as economic indicators showed the economy contracting earlier this quarter.
Northern Europe’s wood markets have also felt the effects of geopolitical unrest. Russian log imports were cut off to Finland in the wake of Russia’s Ukraine invasion in2022. Relative to other European prices, this caused a 10% jump in prices.
Russian sawlogs were an important piece of the puzzle in overall European lumber stocks. Losing this country’s resources (and others like Ukraine and Belarus) tightened up stock and demand across major wood-producing countries.
Countries like Sweden compensated for this loss by seeking out sawlog imports from other countries such as Latvia and Estonia. Of course, the higher costs of imports from these countries mean a jump in prices. Wood Resources International reports a 60%price increase for Swedish sawmills between the pre-Russia invasion in 2022 to the first6 months of 2023.
In Brazil, the largest producer of global sawlogs, prices have also continued to rise. Data from
Resource Wise’s online cost tracking platform Wood Market Prices shows an over 200% increase in Brazilian sawlog prices between the start of 2021 and Q2 2023.
Brazil’s forestry industry continues to push the country into a broader global position. Accordingly, demand for various wood products has surged, showing impressive growth against waning markets like Canada.
