The gale force winds that hit Northern Europe in mid-January have caused immediate problems for the Baltic sawmilling industry.

As power lines were ripped down by the wind, many sawmills were without electricity for days, bringing production to a standstill. Although accurate figures for Latvia, Estonia and Lithuania are not to hand, it is estimated that over three million m3 of windthrown timber has been left on the forest floor. The damaged trees will need to be recovered with some urgency otherwise the logs will become prone to rot, or too discoloured for further use.

The scale of damage in the Baltic region equates to only a fraction of the devastation to the Swedish forests, where the latest count is reported to be over 80 million m3. It is the volume of Swedish fibre that is worrying the Baltic producers.

Exactly what kind of legacy these events will leave has become a hot topic of debate. Some fear that there will be a glut of logs on the market which will force down prices and undermine the sawn timber market. Others believe that most of the volume will be chipped for anything ranging from pulpwood to biomass fuel.

Clean-up costs

Whatever lies in store during the year, the cost of clearing the roadways and sorting the logs will be high, and charges for forest handling and harvesting services in Sweden have already doubled.

&#8220Whatever lies in store during the year, the cost of clearing the roadways and sorting the logs will be high, and charges for forest handling and harvesting services in Sweden have already doubled”

One agent said that a number of his Latvian producers were expressing fears that the Swedes may start producing unseasoned wood, probably at cheap prices for a quick return. Normally most of the Swedish cut is sold as kiln-dried in both the quality and structural grades, and it is the unseasoned market which is usually the battleground between the Russian and Baltic shippers. If the Swedes were to enter this market, an acute oversupply is conceivable.

Conversely, there have been log shortages at many of the Baltic mills for several years, and Swedish sawmilling groups have been buying logs from the region, particularly from Latvia where prices have escalated. An improved supply of sawlogs could help some of the mills redress the situation, even to the point where it might become feasible for Swedish forest owners to export raw material into Latvia.

The outcome will depend on the condition of the trees. After crashing down on top of one another, a large proportion of the logs will be split and shaken too badly for sawn wood and reject levels are likely to be high. As many of the trees will have been snapped in half by the wind, the specifications from recoverable material could be very limited and only yield short lengths, and downgraded to fencing or packaging material. The estimates of damaged trees includes a volume of smaller immature trees and saplings which will not be large enough to use at the sawmills.

Due to the logistics involved in separating spruce from pine logs, it is probable that more timber parcels will be sold as mixed species with a significant increase in the redwood content. This will not please UK carcassing buyers who have a strong preference for whitewood, many of whom will remember the last occasion when damaged material found its way into dry-graded specifications. As the redwood volume increased, an alarmingly high level of material was found to be substandard and off-grade in spite of being stamped. This gave rise to claims and reduced confidence in some mills’ grading procedures.

Turning to the UK market, trading among merchants was found to be better than expected during January, although some reported that sales of dry-graded timber were slow. Since the return from the Christmas holiday there has been some confusion over market levels as the heavy increases in shipping costs have been reflected in import costs. In general terms, ex-quay selling levels have increased by around £8/m3 for dry-graded material, while unseasoned stocks have increased between £4-5/m3.

Arrivals from the Baltics were hampered by the storms, and severe conditions at sea caused delays in shipments. This situation compounded existing problems caused by shortages in vessel space.

When all things are taken into consideration, Baltic shippers have been subjected to a great many uncertainties: log shortages and rising prices, global shipping markets, slowing demand and the forces of nature. When the full effect of the storm damaged forests is felt in the market place, the next uncertainty, that of selling prices, will be waiting there to meet them.