Log prices remained unchanged since the end of December 2007. Azobe was slightly weaker due to lower demand from European buyers. Belli was also down because of ongoing negotiations by Indian buyers and reduced demand from China. Moabi prices were up on very good demand by France, where markets had held very firm through the last quarter of 2007. Sapele and sipo logs had also been in strong demand in France, Germany and China, where supply of these species had been too low and buying had taken place despite recent gains in price.
Production also had been barely sufficient to satisfy the renewed buying activity. Apart from these particular demand surges, exporters reported that demand from Europe had been slow throughout the Christmas and New
Year vacations.
As anticipated, European markets were very dull and demand was low with exporters receiving only sporadic enquiries to fill gaps in stock of particular species such as sapele and sipo. Demand for all markets were moderate though shipments for China and India were proceeding at
slightly lower levels. Exporters from Gabon awaited news on the proposed full implementation of a revised log quota system while importers will want to assess the potential
impact of any overall restriction in the volume available
for export.
At end December, sawn lumber prices had been stable
though higher demand for sapele and sipo did allow
producers to raise prices by EUR40/ m³ for sapele GMS
FAS with competition from traditional buyers [such as]
Spain and high demand from China. Sipo also rose by
EUR50/ m³ for GMS FAS and EUR25/ m³ for scantlings,
with especially firm demand from France and Germany.
Yet, producers noted that competition from Far East
meranti may become more intense with prices expected to
be around EUR600/ m³ for KD sawn lumber against
EUR620 to EUR640/ m³ for sapele and sipo. Some
exporters predicted that sapele prices might weaken
slightly in the first quarter, though might be offset by the
shorter supply route and faster delivery times for West
African timbers.
At the start of the New Year, markets for sawn lumber
were very quiet. Some European traders were forecasting
much lower consumption in the first quarter, by much as
25% less demand than during the same period in 2007.
These opinions may well be speculated on the basis of the
sub-prime financial problems triggered by the property
market problems in the US and are spreading to Europe.
Certainly, the UK housing market is slackening, although
the current slow pace is quite normal given the time of
year. Underlying demand for houses remains very strong,
with the government proposing some 2-3 million new
homes to be built to satisfy demand from the rising
population. West African producers report good demand,
although there are supply problems due to heavy rains,
particularly in Cameroon. There is some concern that West
African prices may be in doubt as reports indicate that
Asian mills have also been subject to higher domestic log prices, poor weather for logging and much increased
freight costs, which puts them at a disadvantage in
negotiating prices. The Chinese New Year will be
celebrated this year in mid-February, when production
tends to be reduced.
West African sawn lumber prices have remained very firm
and have held on to gains experienced during the 4th
quarter of 2007 for selected species. Lumber price
movements to date have revealed that no prices fell during
2007 and some 18 premium species made substantial
gains, notably sapelli and sipo, which were up around
EUR100/ m³ and bubinga FAS GAS, which moved up
some EUR200/ m³. Douka also was in high demand with
increases of EUR102/ m³ for GMS and EUR60/ m³ for
scantlings. Moabi, tiama/kossipo and padouk prices all
appreciated around EUR60 to EUR75/ m³ range. Okoume
lumber also made some inroads in the market and added
around EUR75/ m³ FAS GMS. Ayous and movingui had
modest gains, within the usual range of EUR18 and
EUR30/ m³. Iroko had a mixed year with prices moving
within a range of EUR5 to EUR20/ m³ in response to
demand variations, but ended the year virtually
unchanged.
The current firm stand on prices by Asian exporters seems
likely to hold markets steady at least through the first
quarter of 2008.
| West Africa logs, FOB |
€ per m3 |
| Asian market |
LM |
B |
BC/C |
| Acajou/ Khaya/N'Gollon |
221 |
190 |
175 |
| Ayous/Obéché/Wawa |
221 |
205 |
168 |
| Azobe & Ekki |
152↓ |
152↓ |
91↓ |
| Belli |
198↓ |
198↓ |
- |
| Bibolo/Dibétou |
168 |
167↑ |
114 |
| Bubinga |
533 |
457 |
381 |
| Iroko |
289 |
274 |
259 |
| Okoume (60% CI, 40% CE, 20% CS) |
- |
150 |
- |
| Moabi |
335↑ |
335↑ |
282↑ |
| Movingui |
205 |
190 |
152 |
| Niove |
129 |
129 |
- |
| Okan |
198 |
198 |
152 |
| Padouk |
289 |
289 |
267 |
| Sapele |
297 |
297 |
282↑ |
| Sipo/Utile |
335 |
305 |
267 |
| Tali |
190 |
190 |
152 |
| Gabon Okoumé logs, FAS* |
€ per m3 |
| Grade |
Asia |
Europe |
| QS |
213 |
219 |
| CI |
171 |
171 |
| CE |
146 |
150 |
| CS |
108 |
111 |
*Based on SNBG official prices
| West Africa sawnwood, FOB |
€ per m3 |
| Ayous |
FAS GMS |
396 |
| Fixed sizes |
427 |
| Okoumé |
FAS GMS |
335 |
| Sel. & Bet. GMS Italy |
310 |
| Sel. & Bet. fixed sizes |
- |
| Sipo |
FAS GMS |
680↑ |
| FAS fixed sizes |
- |
| FAS scantlings |
670↑ |
| Padouk |
FAS GMS |
600 |
| FAS scantlings |
630 |
| Strips |
425 |
| Sapele |
FAS Spanish sizes |
550 |
| FAS scantlings |
635 |
| Iroko |
FAS GMS |
458 |
| Scantlings |
519 |
| Strips |
304 |
| Khaya |
FAS GMS |
396 |
| FAS fixed |
427 |
| Maobi |
FAS GMS |
630 |
| Scantlings |
645 |
| Movingui |
FAS GMS |
460 |
|
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