Timber Trends week 46: Record-High Timber Prices, Microsoft's CLT Data Centers, and NASA's Wooden Satellite

Readers on VonWood.com get this news first. Sign up for free today to stay up to date with the latest in timber. Including news and pricing updates.

Industry Overview

This past week has seen significant developments across the wood and timber industry, with a particular focus on market dynamics, regulatory changes, and innovative advancements. Key highlights include the ongoing challenges posed by high wood prices in Poland, increasing demand and price adjustments in Finland, and significant regulatory discussions within the EU concerning deforestation regulations. Additionally, advancements in technology and sustainability are underscored by innovative projects such as Microsoft's use of cross-laminated timber in data centers and NASA's launch of the first wooden satellite.

Market Updates

In Finland, wood prices continue to rise, with forecasts from the Pellervo Economic Institute predicting a further increase into next year. The price of logs is set to rise by about eight percent this year, with softwood prices expected to stabilize with a five percent increase next year. (source: Timber Industry News)

Meanwhile, Polish sawmills are struggling due to high domestic wood costs, the highest among neighboring countries, which has resulted in operating losses as production costs surpass revenues. (source: Timber Industry News)

In Norway, timber prices have reached record levels, with a 26% increase compared to the previous year. This increase reflects the resilience and growth of the Norwegian timber industry, driven by high demand. (source: Timber Industry News)

A recent study reveals significant imbalances in wood supply across Europe, with notable softwood shortages in Germany (3.8 million m3), Norway (1.5 million m3), and the Czech Republic (3.4 million m3), while hardwood is oversupplied in some areas, such as Germany (3 million m3). Expanding procurement radius beyond 100 km could alleviate shortages, raising sawmill utilization in Germany from 72% to 90%. Broader sourcing strategies are needed for sustainable growth.

The mood in the German wood industry improved slightly in October 2024, with companies more satisfied with the current situation and optimistic about the next six months. The current situation assessment rose to -26.2 points (from -28.7), and the outlook improved to -21.4 points (from -25.4). The HDH economic indicator increased to -23.8 points (from -27.1). Despite this, the business climate remains weaker compared to the manufacturing sector, which improved to -20.6 points. The gap between sectors has narrowed, but sentiment remains mixed, with construction faring better than wood packaging, sawmills, and wood-based materials. Housing demand shows cautious recovery, indicated by increased housing loans in Q3.

Policy and Regulation

The European Union is currently facing discussions around the implementation of the European Deforestation Regulation (EUDR), which has been delayed by a year due to concerns over preparedness. This regulation requires companies to ensure that their supply chains are free from deforestation, affecting various commodities including timber (source: Timber Trader UK )

In addition, EU lawmakers are in talks to potentially weaken parts of the EUDR, which could exempt certain countries from its obligations, raising concerns about its effectiveness in combating deforestation (source: Global Wood Markets Info)

Technology and Innovation

Microsoft is pioneering the use of cross-laminated timber (CLT) in its data centers to reduce carbon emissions. This initiative is part of Microsoft's broader sustainability goals and represents one of the first uses of engineered wood at a hyperscale in the U.S. (source: Timber Industry News)

In a notable development for sustainable space exploration, NASA has launched the world’s first wooden satellite, marking a significant step toward using timber in space exploration. This initiative aims to reduce space debris by utilizing biodegradable materials (source: Wood Central)

Outlook

Looking ahead, the wood and timber industry will likely continue to navigate complex market conditions influenced by regulatory changes and fluctuations in supply and demand. The anticipated stabilization of softwood prices in Finland and ongoing regulatory discussions in the EU are expected to shape market dynamics in the coming months. Moreover, advancements in sustainable practices and technology, as seen in Microsoft's and NASA's initiatives, will likely continue to drive innovation within the industry. As these trends unfold, stakeholders should remain vigilant and adaptive to the evolving landscape.

About VonWood

Founded in 2022, VonWood is the digital platform aimed at facilitating the transition to digital within the wood industry by improving the efficiency and transparency of the sector through providing a unique platform that connects buyers and sellers. The platform increases accessibility and availability of wood, ensures greater efficiency, enables lower prices, provides greater transparency regarding the origin and quality of the wood, and also promotes sustainability by sharing unique information about the carbon footprint of the supply chain. Furthermore, VonWood contributes to tree planting for every tree that has been cut. VonWood currently operates within the EU and the UK. Learn more at www.vonwood.com