Wood, rising prices continue in early 2025

(Il Sole 24 Ore Radiocor) - Caught between a shortage of logs and sawn timber and the consequent increase in international price lists, Italian manufacturers of pallets and industrial packaging are competing with the construction and furniture world for volumes and assortments. Conlegno, which brings together more than 2,000 wood packaging and pallet companies, has repeatedly raised the alarm in recent months about the risk that there would not be 'enough wood' for everyone and everything at frequent meetings in the various regions of Italy. A new stop is the one on 28 March in Carlentini (Sr) in Sicily with the focus precisely on the issue of whether there will be enough wood in the future.

The Conlegno Study Centre's forecasts were for the medium term, but the trend of negative phenomena is dramatically intensifying: looking at the case of Trentino, where before the storm Vaia logs were being cut to provide 500,000 cubic metres of timber: today the figure is 250,000 and it is hoped to reach 450,000 cubic metres in 2025, but with a post-Vaia production capacity of 1.2500,000 cubic metres (750,000 cubic metres of logs are missing from the roll call), due to a second environmental phenomenon: the infestation of the bark beetle insect, which reduces quality and quantity. Again in Trentino, since 2021 the increase in the production capacity of sawmills equipped with 4.0 technologies has made it possible to exploit a large volume of felled trees, to purchase logs directly from abroad, to keep prices low and to supply the Italian market with sawn timber. In Trentino, the Autonomous Province's commitment to plan cuts in 2025 for at least 450 thousand cubic metres will not be enough. The difficulties linked to national logs and the reduced availability of logs from Austrian and German suppliers will be a serious problem for all first-processing companies and the auctions of national forest lots will represent price wars. Switzerland is also one of the suppliers to the Italian market, and even in the Alpine country the weather is working against it: excessive rainfall makes harvesting difficult, as will insect damage and reduced stocks in 2024.

Italy's annual requirement of coniferous wood is 4 million cubic metres,' the Conlegno Research Centre recalls, 'and Italian production, including that of Trentino, mitigates our risk of importing 80 per cent of what we need, but when foreign suppliers also reduce the availability of timber, our exposure to the effects of price rises inevitably increases. The Czech Republic's forest industry is one of the main suppliers of logs to Austria and Germany, which are in turn our first suppliers of sawn timber. In February 2025 came the announcement that the Czech Ministry of Agriculture, various associations of the timber and construction industry, and the Chambers of Commerce had agreed to increase the national added value created by the Czech forests and to promote timber construction for a limited period of time by reducing exports (we are talking about approximately 2 million cubic metres of logs travelling from the Czech Republic to Austria in 2024, which is likely to decrease dramatically in 2025). Also at the beginning of the year, 20 Swedish sawmills slowed down or suspended production for a volume of 4.5 million cubic metres due to rising log prices and cutting difficulties caused by adverse weather conditions: in four years, the price of Swedish timber has doubled.

Now this is also happening in Italy and prices are going through the roof: from 25 euros per cubic metre by the roadside (consider that Vaia logs used to be bought for less than 15 euros per cubic metre), they are rising to 90 euros per cubic metre by the roadside. Considering that pallets are made of 75-80% wood, the raw material for these products will also cost three times as much.

Climate, weak demand, high prices and rising costs are not the only phenomena reducing the availability of wood: the unknown of US duties and the slowdown of the Chinese construction market may increase the availability of logs but not lower prices. In fact, European producers sold 2.9 million cubic metres to the Asian giant in 2024, a drop of almost 50% compared to 2023, which led the old continent to contribute 12% to timber imports. Germany has been the leading exporter to the East, but the country is now faced with a low availability of material due to insects that reduce the quality of logs and inhibit felling. For industrial packaging, it is necessary to add the monitoring of the mostly European Osb market and plywood, which, after the ban on Russian birch plywood, has turned towards heliotree pine plywood from Brazil or plywood from China. Compared to 2024 in early 2025, Osb for industrial plywood is up by 20 per cent due to a general rise in production costs and a lot of material going to the US from Europe (not yet affected by Trump's wood tariffs), while helium pine plywood compared to 2024 the first months of 2025 is tending to be stable, but there is concern about the anti-dumping action that will have its outcome in the autumn of this year (in fact in March 2025 there was the announcement by the EU of the start of anti-dumping action on coniferous plywood from Brazil). These phenomena explain the recent steady increase in prices but do not allow forecasts to be extended beyond June: in fact, as the Conlegno Research Centre points out, prices and availability depend on trends in demand for timber construction in Europe and the rest of the world, and above all on the production of the large European sawmills that export. The Italian requirement of 4 million cubic metres is to be divided 75% to the producers of wooden pallets and packaging and 25% to the producers of buildings and roofs: inevitably the packaging sector will suffer the most. The fact that with the Epal system Italians have good levels of reuse of wooden pallets is not enough. With an Epal pallet production of about 6.5 million pieces, a repair of about 5.3 million, it covers part of the needs of an industrial and commercial system that is strong in exports; the repair has grown by 4% in 2024 over 2023, but it only meets part of the needs of 2.3 million tons of softwood. Not to mention the need of industrial packaging manufacturers, which is 1.1 million tonnes and almost entirely serves exports to non-European destinations. One solution may be the valorisation of the national heritage, which seems to be the most concrete and promising path (although not the most immediate), and in parallel to focus strongly on wood recovery and recycling. The alternative is a constant and growing exposure to the risk of imports in terms of both volumes and prices.