| Maritime pine prices are rising in the French south-west (Photo: Robert Wood) |
Are the French softwood markets at a turning point? The question deserves to be asked since the mixed tendencies are observed in the end of this year. On a global level, specialists do not rule out a risk of a slowdown in the global economy in 2019, that would reflect a slight decrease in world trade that started in the second quarter of this year. The trade war with China triggered by Trump (25% tariffs on imports from China in 2019), soaring oil prices (+ 35% in one year), European instability (Brexit, Italian deficit, rising populism …) — all of these are the factors of uncertainty that stock markets reacted to recently.
The National Institute of Statistics and Economic Studies of France (INSEE) revised its 2018 growth forecast down to 1.6% (compared to 2.2% in 2017). Now this tendency is also reflected by the decrease in construction. According to General Commission for Sustainable Development/CGDD (1), the decrease in housing starts permits was observed from July to September 2018 (from 2.6% down to -2.1%, from April to June 2018). The actual housing starts are now affected (-4% in the last quarter after -1.6% in the previous quarter). These statistics do not bode well for the winter season ahead.
Fortunately for some French woodworking companies, the activity remains very satisfactory. This is the case for those who supply pallet and crate products. “Since 2007, I haven’t had as much work as this year,” says Fabien Salles, manager of a medium-sized in Lozère. In fact, apart from the light packaging sector, whose turnover declined significantly (-4% in Q3 2018 y-o-y), the other sectors continued to follow the positive trend observed at the end of 2017. As of September 2018, the French wood pallet producers’ turnover grew by 4% y-o-y. The turnover of the crate and industrial packaging companies followed suit (but in a less impressive manner), it grew by 1% in 3Q 2018.
MARITIME PINE PRICES SOARING
The majority of the packaging sector representatived interviewed by the Economic information center of the association France Bois Forêt noted that prices were stable or increasing. But it is especially the ongoing raw material price growth that worries the French wood processing enterprises. “In the south of the Massif Central, the tension in sales is so high that one must revise one’s bids significantly upwards during the auctions to have hope to leave with some sawlogs,” says Fabien Salles.
In the French south-west, the raw material supply situation seems even more critical. On the one hand, the Aquitaine massif is lifeless. The storms Lothar and Martin (1999), and then Klaus (2009) devastated the Landes de Gascogne. The raw wood is lacking. On the other hand, the demand is high, industries are hungry for wood. The sawlong and standing timber prices are soaring.
At the recent private sales and the auctions held by ONF, the prices were once again increasing (see Tables 1 and 2). At the auctions held on October 11 and 18, 2018, all or almost all goods were sold. In a very active market (5 offers on average per lot), 95% of volumes were sold. 1 m3 logs are now sold for 52 euros/m3 while small sized thinning wood (0.3 m3 to 0.7 m3) prices ranged from 35 euros/m3 to 45 euros/m3. Since 2016, the value of maritime pine has increased by 40%. With the law of supply and demand at its finest, no one knows when the price hikes will subside.
(1) Press release published on 29/10/2018
Table 1 :
MARITIME PINE PRICES SOARING AT THE AUCTIONS IN AQUITAINE
ONF auctions, the Landes de Gascogne
Prices en bloc for standing timber expressed in euros/m3, under bark
| Q2 2016 | Q4 2016 | Q2 2017 | Q4 2017 | Q2 2018 | Q4 2018 | Change over Q2 | Change y-o-y | |
| 0.5 m3 | 32 | 32 | 33.5 | 36 | 37.3 | 41 | +9.9% | +13.9% |
| 0.75 m3 | 35.5 | 34.7 | 35.5 | 39 | 39.50 | 48 | +21.5% | +23.1% |
| 1 m3 | 36 | 35.7 | 37.5 | 41 | 47.70 | 52 | +9% | +26.8% |
| 1.25 m3 | 37 | 37 | 39 | 42.5 | 48.15 | 53 | +10.1% | +24.7% |
| 1.5 m3 | 37.7 | 38 | 40 | 43.5 | 48.35 | 53 | +9.6% | +21.8% |
| 1.75 m3 | 38 | 39.4 | 41 | 44.5 | 48.35 | 53 | +9.6% | +19.1% |
| 2 m3 | 39 | 38.4 | 42 | 45.5 | 49.60 | 53 | +6.9% | +16.5% |
Source : Robert Wood, according to the data of CRPF Aquitaine
Table 2 :
IN PRIVATE FOREST OF AQUITAINE MARITIME PINE PRICES ARE GROWING
Auctions in Labouheyre (Landes)
Prices en bloc for standing timber expressed in euros/m3, under bark
| Q4 2016 | Q2 2017 | Q4 2017 | Q2 2018 | Q4 2018 | Change over Q2 | Change y-o-y | |
| 0.5 m3 | 32.5 | 37 | 37 | 40.7 | 44 | +8.1% | +18.9% |
| 0.75 m3 | 34.5 | 37 | 40 | 43.75 | 46.8 | +7% | +17% |
| 1 m3 | 35 | 39 | 42 | 49.3 | 50 | +1.4% | +19% |
| 1.25 m3 | 37 | 38 | 44 | 50.6 | 52 | +2.8% | +18.2% |
| 1.5 m3 | 39 | 40 | 45 | 49.50 | 52.8 | +6.6% | +17.3% |
| 1.75 m3 | 40 | 41 | 46.5 | 52.6 | +13.1% | ||
| 2 m3 | 41 | 41 | 47.5 | 52.75 | +11.1% |
Source : Robert Wood, according to the data of CRPF Aquitaine