🔍 European Timber Markets: The German Premium Question
Dear Fellow Forest Professional,
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THE KEY DYNAMIC
German sawmills are reportedly paying €105-110/m³ for spruce sawlogs while Central European suppliers quote €95-100/m³. But the devil is in the details - and the details remain murky.
VERIFIED MARKET DATA
What We Know (Confirmed Sources)
Finnish Market³
Spruce sawlogs: €84/m³ (Luke Finland, August 2025)
Pine sawlogs: €82/m³
Trend: -2% week-over-week, seasonal decline plus oversupply
German Historical Context⁴
July 2024: €90-105/m³ for spruce A/C grade
Construction crisis deepening through 2025
Import volumes up 35% year-on-year suggesting domestic supply constraints
Polish State Forest Auctions⁵,⁶
August 2025 e-drewno platform results available
New regulations favoring domestic processors
10% penalty for distant buyers affecting German purchasers
2 million m³ less timber available in 2025 vs 2024
What We Don't Know (Data Gaps)
Current Czech export prices for comparable grades
Exact German mill gate prices for September 2025
Transport costs for specific routes (estimates range €9-15/m³)
Grade equivalency between markets (German L 2b B/C vs. Czech III A/B vs. Polish S2A)
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EUROPEAN TIMBER PRICE OVERVIEW
Week Ending August 30, 2025
Market | Spruce Sawlog | Pine Sawlog | WoW Change | Key Driver |
|---|---|---|---|---|
Finland | €84/m³ | €82/m³ | -2% | Seasonal decline, oversupply |
Sweden | €100/m³ | €89/m³ | 0% | Record highs but price cuts spreading |
Germany | €107/m³ | €100/m³ | 0% | Construction weakness, tight supply |
Poland | €95/m³ | €90/m³ | 0% | Export focus, new domestic regulations |
Austria | €110/m³ | €105/m³ | 0% | Beetle salvage driving volumes |
Czech Rep | €98/m³ | €92/m³ | 0% | Post-calamity stability, steady exports |
The Theoretical Spread: German spruce at €107/m³ vs Czech €98/m³ = €9/m³ differential. Our analysis: After realistic transport and compliance costs (€11.50-19.50/m³ based on our estimates), traditional arbitrage opportunities appear challenged. Your costs may vary - use our breakdown as a starting point for your own calculations.
Price Disclaimer: All figures represent publicly available market intelligence and auction data. Actual transaction prices vary by region, grade, volume, and delivery terms. Prices shown are indicative week-end snapshots. Always verify with local suppliers before executing trades.
Central European Timber Arbitrage Matrix (September 2025)
Route | Purchase Price | Transport* | EUDR Docs | Total Cost | German Mill | Net Margin |
|---|---|---|---|---|---|---|
Czech → Germany | €98/m³ | €10-14/m³ | €1-5/m³ | €109-117/m³ | €107/m³ | -€2 to -€10/m³ |
Poland → Germany | €95/m³ | €10.50-14.50/m³ | €1-5/m³ | €106.50-114.50/m³ | €107/m³ | +€0.50 to -€7.50/m³ |
Poland → Germany (certified) | €95/m³ | €10.50-14.50/m³ | €1/m³ | €106.50-110.50/m³ | €107/m³ | +€0.50 to -€3.50/m³ |
*Transport includes freight, handling, and administrative costs. See breakdown below.
MARKET STRUCTURE ANALYSIS
The Theoretical Arbitrage Problem
Market participants report potential price differentials of €5-15/m³ between German mills and Central European suppliers. However, several factors complicate exploitation:
1. Product Specification Mismatch
German mills specify precise length and diameter requirements
Czech/Polish grades may not align with German standards
Quality premiums/discounts can eliminate apparent spreads
2. Regulatory Friction⁷,⁸
Polish regulations now favor domestic processors
Czech Republic planning export restrictions
EUDR compliance adding €5-15/m³ to non-certified wood (deadline December 30, 2025)⁹
3. Logistics Reality
Transport €8-11/m³ base freight plus additional costs our analysis estimates at €3.50-8.50/m³ (see detailed breakdown)
Border handling adds €2-3/m³
Payment terms and currency hedging costs often ignored
MILL INTELLIGENCE
Confirmed Closures
Metsä Fibre Joutseno (Finland)¹¹
690,000 tonnes/year pulp capacity
Temporary shutdown, restart dependent on Asian demand
Pulpwood backing up in Finnish yards
Market Impact: Finnish oversupply worsening, but limited effect on German import needs given different product mix and logistics costs.
Expansion Activity
Stora Enso Oulu (Finland)¹²
New line: +750,000 tonnes/year packaging board
Started operations March 2025
Creating additional raw material demand
CHINA DEMAND SIGNAL
Structural Weakness Continues¹³,¹⁴
EU softwood exports to China remain well below historical levels:
German softwood log exports dropped 69% in 2024
H1 2025 showing continued weakness
No recovery expected through Golden Week (Oct 1-7)
Market Impact: European prices must find domestic floor without Chinese support. German construction weakness removes another demand pillar, creating a challenging pricing environment through Q4.
CURRENCY & POLICY WATCH
Exchange Rates¹⁵
EUR/PLN: 4.27 (relatively stable)
EUR/SEK: 11.055 (Swedish exports gaining competitiveness)
Political Context¹⁶,¹⁷
Poland: Karol Nawrocki won presidential election June 1, inaugurated August 6
Policy continuity expected on forestry regulations
WHAT TO WATCH
Near-Term Indicators (September)
Week 1-2
German mill restart schedules post-maintenance
Polish State Forests September auction results
Czech beetle salvage volume reports¹⁸
Week 3-4
German construction sector data (September 15)
EUR/PLN movement around 4.27 level
Swedish follow-through on price cuts
Actionable Intelligence Gaps
Before any trading decisions, market participants need:
Current Czech export prices from primary sources
German mill gate prices for specific grades
Your specific all-in transport costs (our estimates: €11.50-19.50/m³, but verify with your logistics providers)
Confirmation of grade equivalencies
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RISK FACTORS
Why the Spread May Not Be Real
Hidden Costs - Transport Cost Reality Check (per m³)
Base freight: €8-11
Border paperwork: €0.50-1
Unloading/handling: €1
Driver waiting/delays: €0.50-1
EUDR compliance: €1-5
Payment terms impact: €0.50-1
TOTAL REALISTIC COST: €11.50-19.50/m³
The numbers show that with best-case scenario (certified wood, efficient logistics), Polish timber MIGHT yield €0.50/m³ profit - but that's razor-thin and assumes everything goes perfectly.
Market Evolution
German construction weakness could push mill prices below €105/m³
Czech/Polish suppliers may raise prices as harvest season progresses
Transport capacity constraints in Q4 could add €3-5/m³
Weather disruptions affecting harvest and transport
THE BOTTOM LINE
The reported German premium exists but remains difficult to capture profitably. Our calculations suggest most arbitrage routes currently yield negative margins of €2-10/m³. Polish certified wood routes might achieve €0.50/m³ positive margin under optimal conditions. However, your specific costs may differ - we encourage running your own numbers using our framework below.
Critical data gaps prevent definitive arbitrage calculations. Those with established relationships and verified pricing may find opportunities, but newcomers should proceed with extreme caution.
The Swedish price signal combined with absent Chinese demand suggests broader European softening ahead. Watch German construction data closely - further weakness could eliminate any remaining premiums entirely.
DISCLAIMER
This market commentary compiles publicly available information and market participant observations. It does not constitute trading advice. All prices are indicative and should be independently verified. Market conditions change rapidly. Past patterns don't predict future results. Readers bear full responsibility for their commercial decisions.
ForestryBrief provides market intelligence, not investment recommendations. Consult qualified professionals before trading. Commodity markets involve substantial risk of loss.
SOURCES
Additional market data from: Swedish Forest Agency, Eurostat, UNECE Forest Products Annual Market Review, company reports. Data compiled August 29, 2025, 23:00 CET.
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