Wood prices have risen sharply. This jump hit the paper companies, but not only them. With us is Marek Kub’jak, president of the Polish Chamber of Commerce and Industry of the Woodworking Industry.
BIZNES24.PL: Mr. President. Data from the State Forest Service for the entire year 2022 showed the average price of wood at the level of PLN 340 per cubic meter. This was the average price for the whole of last year. However, the average minimum selling price on the forest and wood portal this year was set at PLN 269 per cubic meter. How much do you think the actual prices will differ from the minimum price set by the Forests?
Marek Kub’how: Well, ladies and gentlemen, these are the statistics provided by Lasy. According to them, the price of wood is falling, but in reality it is not. Well, dear ones, at the end of 2022, the minimum prices were raised from 30 to 50%. These are the minimum prices at which we bought all enterprises in previous years, including the paper industry, cardboard industry, sawmill industry.
However, last year these prices were sharply raised; they are somewhat equal to these free market prices, but the market situation is completely different because these free market prices are actually falling now. But if you look at the average purchase prices, they can be very comparable to last year. So, considering that the prices on the world and European markets are falling, they will remain in our country. And today we are losing our competitiveness, we are actually losing to the Scandinavian countries, we are losing to Germany, and it is becoming increasingly difficult to sell our products.
BIZNES24.PL: But you said that the prices have decreased a bit. Tell me, please, what are the current prices in the main categories of these raw materials?
Marek Kub’as: Ladies and gentlemen, when it comes to lumber, the minimum prices are currently between 300 and 320 PLN, but these were the minimum prices during these closed tenders. However, at the moment they are also offered at such prices in open auctions. I don't know what the reason is, but some companies still buy these raw materials for 400 and more than 400 zlotys at the average price, and this is simply irrational and abnormal, because today lumber on the Polish market is sold for 800-900-1000 zlotys. So the total production costs will exceed what is happening on the market, there is simply no chance. This situation would be better normalized from the point of view of wood prices if the wood was not sent for burning, but a lot of it was burned at the end of the year, especially in winter, and all suppliers who supplied wood for burning and for large thermal power plants and paid several hundred zlotys per cubic meter of wood in the forest. Therefore, this is a very abnormal situation.
Regarding farms – they used to cost 2,000 zlotys, but now you can buy them for 1,000-1,100-1,200 zlotys. It depends on the size because it's also an uneven farm, but lumber prices are actually down 30-40% across the board, so that's a very big drop. And if we're talking about the products supplied by the industry, say the recording industry, the paper industry, then this is the balance of S2 – an S2 balance in global markets costs 20/30 euros, and here we have 50/60 and often more, so it is definitely more expensive. So today the production of cardboard in Poland is more expensive than in Western Europe, the same applies to paper, hence the decline in production and rather large inventories in these companies. If the construction market does not start, we will have very big problems.
BIZNES24.PL: Who is making money from these high prices for raw materials, because I understand it is not you? Not the sawmill industry?
Marek Kub’as: Well... what affects? Of course, this affects the fact that wood from Poland goes abroad. The Chinese buy because their prices are much higher. However, a large amount of wood was burned. Now it is ending, because the winter is actually milder, coal has fallen, pellets have fallen, and firewood, as you know, has also become cheaper. But the situation on the markets is absolutely abnormal, because currently a lot of lumber is coming to Poland from abroad, especially from Scandinavia, and a little from Germany. Well, we'll see how long it takes, but many, many Polish businesses will have some problems.
And they will also, they will... In our case, the situation is more difficult, because in the Polish forest industry there are companies with foreign capital with great financial potential, and these companies will probably manage. But there are many fairly well-organized, but large companies that legally hire workers, legally buy raw materials, legally sell lumber, but we have thousands of companies that practically either work in the gray area or on the edge of the gray area. . So, in general, these bankruptcies may not be so noticeable, because if, let's say, there are ten people working in a company, five of whom are illegal, they don't even know that such a company exists, they will just say that it is not necessary. don't come to work today, come back in a month, two or three. There are thousands of such companies in Poland, and no one sees it.
Source: BIZNES24.PL
