What is FOEX Indexes?

FOEX Indexes Ltd is an independent company providing audited, trade-mark registered pulp, paper, recovered paper and wood based biomass price indices.

Mar 23, 2021

Market Comments

PIX Wood Finland and PIX Sawn Softwood Timber FAS Finland

Copyright©FOEX Indexes Ltd.

PIX Wood Finland and PIX Sawn Softwood Timber FAS Finland – According to the Finnish Sawmills Association, the production of sawn timber in Finland in 2020 was 10.9 million m³, meaning a decline of 500,000 m³, or of 5%, y-o-y. The main reason for the decline is said to be the forest industry strikes in early 2020. Spruce accounted for 5.5 million m³ (-2%) and pine for 5.4 million m³ (-6%). Domestic sawn timber consumption increased by about 8% to 2.7 million m³. Sawn timber imports remained about the same at 500,000 m³, mostly deriving from Russia. Exports of sawn timber, planed wood, gluelam etc. were 8.6 million m³ last year, declining by 8%, or 700,000 m³, from 2019. Exports to some main markets declined clearly, with deliveries to Egypt down by 23%, to China by 22%, the UK by 6% and Japan by 13%. Exports increased e.g., to Saudi-Arabia (+24%), Israel (+10%), and Estonia (+13%).

Freight rates have gone up globally. Drewry’s Composite World Container Index has skyrocketed since November 2020 to a level of above 5,000 USD per 40-ft container throughout January-February, only recently showing some easing. As sawn timber is also exported using containers, especially to the Far East, this nibbles away at some of the recent positive price progress in the export incomes of sawmills. According to Fastmarkets’ Random Lengths International report, Western S-P-F J-grade prices surged last month significantly and impacted Japan’s, its main export destination’s, softwood market. Exporters have noted that the price increases are necessary to be able to produce even modest volumes for the Japanese market. This has created concern about the long-term impact on the Japanese 2x4 frame housing industry, with a fear of this housing type losing some of its share on the market for good.

The roundwood total trading volume in February declined from January but remained again clearly above the February 2020 volume, according to wood trade statistics from the Finnish Forest Industries Federation. Compared to the previous month, the February trade volume decreased by 10%, with both pulpwood and sawlogs showing a similar level of decreases. The declines in volumes of individual grades were between 6% and 13%. Comparing volumes year-over-year, the total volume went up by a whopping 51%, consisting of a 73% jump in logs and a 35% rise in pulpwood. Individual grades varied between +33% in birch pulpwood and +74% in coniferous logs. Most prices got stronger in February. The PIX Softwood Sawlogs Finland index continued its path upwards, now by 67 cents, or by 1.11%, to 61.05 EUR/m³. The PIX Birch Sawlogs Finland index value weakened by 15 cents, or by 0.34%, to 43.68 EUR/m³. The PIX Pulpwood Finland benchmark value strengthened by 21 cents, or by 1.16%, with the index closing at 18.26 EUR/m³.

The Finnish sawn softwood export prices were showing mostly stronger quotes in February compared to the previous month. Both main indices showed a clear strengthening from last month, with most of the sub-indices climbing up too. After a modest rise last month, the PIX Sawn Timber Pine FAS Finland index increased by a clear 7.91 euros, corresponding to 3.97%, with the index settling at 207.40 EUR/m³. The PIX Sawn Timber Spruce FAS Finland benchmark took back more than its retreat last month and went up by 4.65 euros, or by 2.24%, landing at 212.15 EUR/m³.

The PIX Wood Finland price indices are based on the monthly wood trade data by the Finnish Forest Industries Federation, which Fastmarkets FOEX converts to a volume weighted 3-month moving average for our benchmark values, after removing the extreme highs and lows before the index calculation. The PIX Sawn Softwood Timber FAS Finland indices are currently based on monthly price reporting from Finnish export sawmills. The indices are calculated with fixed weights on six sawn timber quality grades, which are individually weighted by the volumes reported by the sawmills.