Expert: Wood Price Remains Low at the Beginning of the Year, but Change Expected in the Second Quarter

According to Toomas Pärtel, chairman of the board of Puumarket, the Baltic region's largest timber retailer, the price of construction timber will not rise significantly in the first quarter, but will likely begin to increase in the second quarter due to raw material shortages.

According to Toomas Pärtel, timber prices are fixed quarterly in advance, and there is no reason to expect significant price increases at the beginning of this year. "The price of timber remained stable throughout the last year, fluctuating within ten percent. Demand for construction timber is actually quite high – in terms of volume, ten percent more was purchased last year than a year before. Wood is a relatively affordable building material, and green trends also support its increased use," said Pärtel.

"The prices for the second quarter are not yet known, but they will be significantly influenced by both RMK and similar timber auctions in neighboring countries, and it is known that volumes are decreasing. RMK put a limited amount of timber up for auction at the end of the year and most applicants were left without, which will start to limit sawmills due to a shortage of raw materials, which will likely push the price up," said Pärtel.

"Log material will no longer come from Russia, and there are similar raw material problems in Finland, where large sawmills are also facing shortages – mainly spruce wood and production volumes have already been scaled back. Pine wood demand is generally somewhat lower and there is enough of it," said Pärtel.

"In parallel, the economy in Europe and demand for materials will begin to recover – the falling euribor supports construction and development activities, and along with continuing inflation, a slight increase in timber prices is likely to be expected from the second quarter onwards," added Pärtel.

According to the chairman of the board of Puumarket, the current price of construction timber is approximately 50% cheaper than in 2022, and the price of general building materials has also remained stable over the past year. "Price competition among sellers has increased, which is favorable for customers. Labor is also easier to find – many construction workers have returned from Finland and good workers are significantly easier to find than in recent years," described Pärtel the state of the construction market.