German Log Exports Impacted by COVID-19 and Other Factors During First Half of 2020

The German log market has been extremely unpredictable during the first half of 2020. The year started with high demand from the export market and the supply of fresh green logs in tight supply. In March, the arrival of the COVID-19 pandemic forced sawmills to close and with it the domestic demand for sawlogs also dropped and with it their prices. Resulting in both domestic and export prices dropping and reversing the gains from the start of the year. Towards the end of the first quarter, spot prices fell to levels that barely covered the costs for logging and hauling the timber. Of note China has quickly become the largest market for German logs, accounting for almost 50% of all exported logs so far in 2020. From January to April this year, almost 2.4 million m3 of softwood logs were shipped to China. Log exportation from Europe to Asia is a new trend. As late as 2017, there were practically no shipments of German logs outside of Europe.