French oak market close to overheating due to unprecedented price surge

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Rarely has a rise in wood prices been so sharp and brutal in France. While oak prices took a hit in the back of the head in 2020 due to the Covid pandemic, barely a year later, demand has picked up at a frantic pace. The pandemic does not seem to be completely stopped yet, but that does not prevent the French oak market from being very close to overheating.

The first autumn auctions, in particular those of Burgundy, leave no doubt about the current price increases. The ONF (France's National Forest Office)  auction in Châtenoy-le-Royal (Saône-et-Loire), on September 7, confirms the upward trends already observed before the summer.

As much in the fall of 2020, the troubled context forced the French sawyers to prudent supplies, as this year the fever reigns with the purchases. Over one year, the price of oak logs has jumped by 40%! In the memory of French industry professionals, this surge is unprecedented.

At the end of the auction, a buyer summarized the price list. "It's quite simple," he says, "2m3 timber is 200 euros, 3m3 timber is 300 euros and 4m3 is approaching 400 euros.''

Another professional, specialized in logs and acting on international markets, confirms the very strong current activity. "My selling prices, both in France and in China, are higher than in 2018." This broker mentions major readjustments in the process of stocks. “Successive lockdowns in Asia, USA and Europe have disrupted the supply chain and the blockade of the Suez Canal has not helped. In addition, French sawyers resumed purchasing in the spring, confidence had returned as well as fear of Chinese competition. "

Other reasons also explain the oak price surge: the boost in the US and Chinese economies, protectionism measures (USA, Russia, certain tropical countries, etc.), less competition from eastern countries. A rebalancing of the markets is taking place, which should operate for the benefit of European oak in a global context of lack of material and general rise in prices.

However, economic history shows that the markets do not like sudden price changes. Moreover, the current sharp drop in sawn softwood prices in the US could well be a sign of a return to more coherent trade.

Oak log prices are rising in France Price in euros / m3 ONF Burgundy public auction

Volume in m3

Q3 2018

Q3 2019

Q3 2020

Q4 2021

Change in % for 1 year

Change in  % over 3 years

1,5 m3

150

125

102

136

+33%

-9.3%

2 m3

204

162

151

210

+39%

+2.9%

2,5 m3

245

190

188

261

+39%

+6, 5%

3 m3

279

216

218

304

+39%

+9%

3,5 m3

308

237

243

343

+41%

+11.4%

4 m3

334

253

266

376

+41%

+12.5%

4,5 m3

356

268

286

403

+41%

+13.2%

 

 

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