Hardwood prices remain stable in Switzerland despite Swiss franc appreciation

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RobertWood/Fordaq
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In terms of A grade, this type of ash is currently being sold for 250 CHF/m3 in Switzerland

After all, it seems the major appreciation of the Swiss franc (CHF) hasn’t led to the disastrous consequences anticipated by the Swiss forest owners. On January 15, 2015, following the decision of the Swiss National Bank (SNB) to end a currency cap that pegged the Swiss franc to the euro, the Swiss national currency soared by almost 20% in just one day. Currently, average exchange rate settled down at the level of 1 euro per 1,04 CHF (against 1,20 CHF before January 15).

If in terms of softwood, the prices have fallen by about 15%, it is not the case of hardwood. The results of the first spring auctions, which have just begun in Switzerland, seem to prove the theory about prices remaining at the level of 2014.

At least, these are the data obtained at the end of March from the trading session in Lausanne. The trading was active, characterized by strong demand (just 2% of unsold goods in terms of volume) in the context of stable prices. Another surprise was the presence of loyal customers from France and Italy, competing for goods, which couldn’t but please the sellers.

Strong demand for oak was especially obvious. Since this species is hard to come by in the neighbouring countries, especially in France, the price pressure was felt in Switzerland as well. In Lausanne, the market was dynamic with 6 offerings for each lot in average. The prices only confirm an upward price trend, increasing at the pace comparable to the one in France (+20% year-on-year).

One of the best goods, classified by the sellers as A grade (25%) and B grade (75%) was bought by the Swiss sawmill owners ''Burgat'' for 550 CHF/m3. In average, B grade wood was sold for 250-300 CHF/m3 and C grade’s prices varied between 80 CHF/m3 and 100 CHF/m3. “The oak price increase is partly compensated by franc’s appreciation”, noted one of the Swiss buyers.

As to ash, the trade volumes were satisfactory. For B grade the prices came up to around 120-140 CHF/m3, C grade assortiments were sold for 70-85 CHF/m3. In its turn, the beech market didn’t show any signs of recovery, the best quality assortments being sold for 70 CHF/m3.

According to Fritz Aegerter, one of the main Swiss traders in wood industry, the prospects of beech are not that bright in Switzerland, where for this species exports call all the shots. “Even though we haven’t completely severed connections with the Eurozone, the Swiss franc appreciation did lead to a number of negative consequences export-wise.”

Another buyer from Switzerland believes, in his turn, that the market will adjust itself to its real level, when all late 2014 contracts expire and the goods issued under these contracts are sold and sawn. In these conditions and without profitable end markets, forest owners prefer forwarding the major part of C grade beech to the local biomass boilers. 

HARDWOOD PRICES, SPRING 2015 IN SWITZERLAND

Roadside prices, in CHF/m3 over bark

Species

Grade

Price in CHF/m3

Oak

A 350 and +
  B

from 250 to 300

  C

from 80 to 110

Beech

B

from 70 to 85

  C

from 55 to 65

Ash

A

200 and +

  B

115 to 150

  C

70 to 85

Source : Robert Wood, ventes du canton de Vaud

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