Sawmills in Europe and North America achieved record profits in 1H / 21
STOCKHOLM, November 29, 2021 / PRNewswire / – Sawmills in Europe and North America posted record profits in the first half of 2021, but fell in the third quarter when lumber prices plunged
Benefits of the sawmill in North America and Europe continued to increase in the spring and early summer of 2021, reaching historic highs on both continents. With lumber prices reaching all-time highs and sawlog costs rising relatively less, sawmill profits hit record highs in 2Q / 21. Gross margins, defined as the margin between lumber prices and net lumber costs, were by far the highest in most areas covered by the WRQ since it began tracking quarterly sawmill profits in 2005. .
Surprisingly strong demand for lumber and high exploitation rates among lumber manufacturers have driven sawlog costs up over the past year, with some of the largest increases occurring in the west Canada, the Nordic countries and central Europe.
Despite higher production costs, gross margins more than doubled in Europe and tripled in North America over the past year. However, in July and August 2021, margins declined significantly due to falling lumber prices, while sawlog costs suffered smaller price adjustments. As a result, many sawmills have reduced their operating rates by Western Canada and the Northwestern United States, where lumber sales revenues often did not cover cash costs.
In the southern United States, gross margins also fell due to falling lumber prices, but thanks to low sawlog costs sawmills were still operating at profitable levels up to 3T / 21. As a result, the estimated gross margins in August were significantly higher than the average for the past decade.
Profit levels at Nordic sawmills have also increased over the past year, albeit at a slower pace than Canada and the United States. Higher revenues for lumber and by-products more than offset recent increases in sawlog costs in both Finland and Sweden to 2T / 21. This positive development has resulted in gross margins for sawmills in the Nordic countries reaching their highest levels in more than 15 years.
Swedish forestry companies have seen their profits grow faster than their Finnish competitors. They benefited from lower sawmill costs than sawmills in Finland and had a higher share of lumber shipments to higher paying markets, including the United States, Norway, UK, the Netherlands, and Denmark. Some of the main destinations for Finnish timber have been low-priced markets such as the MENA region and China.
Are you interested in information on the global wood products market? The Wood Resource Quarterly (WRQ) is a 75-page report produced in 1988 that has subscribers in over 30 countries. Publication tracks sawlogs, pulpwood, lumber and pellets prices and reports on the development of the timber trade and market in most key regions of the world. For more information on the latest trends in the international forest products market, please visit www.prixbois.com
Wood Resources International LLC
Hakan Ekstrom, Seattle, United States
Wood Resources International LLC
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SOURCE Wood Resources International LLC