Global log & sawmilling costs results releasedWith respect to log costs in 2008, the global average annual delivered log cost to sawmills was US$69/m3. According to the 2009 edition of the Global Lumber Cost Benchmarking Report results, the average delivered log cost to sawmills was approximately US$10/m3 lower in Q1/2009, as market prices for logs and lumber dropped in parallel to the weakening market conditions. The Q1/2009 level is slightly lower than that reported in the 2006 report.The lowest delivered log costs in 2008 occurred in Russia (for companies with their own forest licences, where logs are at cost ), with some regions below US$40/m3. The next lowest-cost region was the Canadian Prairies, followed by Chile (where logs were in the US$40-$50/m3 range). The highest delivered log costs in 2008 were seen in China, for mills that used a combination of imported and domestic logs. The next highest-cost regions were in Europe - led by Germany, Finland and Austria - with log costs ranging up to $120/m3, almost three times the cost of logs available in Russia and the Canadian Prairies. Several regional timber cost trends emerged in Q1/2009 from the cost data that was compiled and analyzed on an apples-to-apples basis: - The returns on timber stumpage (or receipts to timber owners) were highest in Europe and the Southern Hemisphere and lowest in Russia and Canada. - Delivered log costs were lowest in Western Canada and Russia and highest in Europe. For the full-year 2008, average mills in the Baltics, Central Europe, Chile and Brazil had the lowest sawmilling costs versus other regions. During the same period, the highest sawmilling costs were incurred in Australia, South Africa, New Zealand, Russia and Eastern Canada. Sawmills around the world vary in scale, technology, flexibility, log size and product/market strategies, so it is not surprising that global sawmilling operating costs (before considering capital costs/depreciation) also show significant variances. From a global perspective, average sawmilling costs in 2008 ballooned to US$75/m3 from a much lower level in 2006; substantially lower operating rates and higher energy costs were the main cost drivers. In Q1/2009, global sawmill costs were somewhat lower due to cost-cutting efforts and improved currency exchange rates relative to the U.S. dollar. Aside from China, the Baltic States, Brazil and Chile had the lowest sawmilling costs (excluding logs) at average mills in 2008; these regions benefited from below-average labour costs, but were disadvantaged by currency rates. The 2009 edition of the Global Lumber Cost Benchmarking Report, released in the second quarter, benchmarks timber and sawmilling costs in 29 producing regions around the world for 2008 and Q1/2009, for both average and top-quartile sawmills. Source: International Wood Markets Group, www.woodmarkets.com |
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