Pallet prices increased very quickly over the first five months of the year. Supplies of small roundwood to sawmills have been tight and where the focus has been on adding value to those logs, the result has been less pallet wood on the market.
All roads lead back to log supply and, according to a spokesperson, Coillte has seen “quite strong price increases across all three product categories”. “Our volume of sales to date is pretty much in line with last year”, said the spokesperson. “We are aiming to hit 1.73m m3 of sawlog this year, which is about 40,000 m3 higher than last year. Based on us keeping up the supply for the rest of 2018, we should have a good year and then it is just down to our customers to move it to the end markets, which they are very positive about”.
They are less positive about the prices they are paying for logs, however, and they do seem to be caught in a Catch-22 situation. “Log prices are currently at an inflated level, way above the market price”, said a major sawmiller. Coillte is building up to consistently selling 1.8m m3 per year but if demand continues at current pace and if global supply remains under pressure, sawmills are still likely to be fighting for raw material. [Source: Extract TTJ Article]