Firewood retailer: Prices not rising, except for pellets and briquettes
While untreated firewood is likely to cost around €80 per cubic meter this coming winter, a shortage of raw materials will exert an upward pressure on the price of wood pellets and briquettes, according to one market player.
Appearing on Vikerraadio's "Vikerhommik" show Wednesday, Mart Liivak, CEO of firewood sales company Harjupuu, said.
"We are mostly selling alder wood – the prices of gray alder and common alder are €78-79 and €85 respectively. Two years ago, the price of alder was €45-50 and €53-55 per cubic meter, so the difference has been quite considerable."
"Prices started to rise in the first half of summer last year, while the peak was reached in the middle of winter. However, in Estonia in mid-winter, the stockpiling of raw wood has ended so consumers switch to dried wood, though in smaller quantities and mostly for saunas and fireplaces," Liivak went on.
The most significant factor is input raw material prices, Liivak added.
Prices this year have fluctuated "like the American mountains," Liivak said, utilizing a common saying meaning to rise up and down a lot, but from now on "nothing significant will likely be experienced with wood prices; they will not fall much, but they won't rise by much either."
Pellets and briquettes are a different story, however. "Since the sawmills are closing down and the sawmill sector is in a very bad situation in general, the raw material from which pellets and briquettes are made is not available either," Liivak continued.
This is due to "quite severe" input raw material shortages, while much also hinges on what will happen with natural gas and electricity prices – at present, these are not exerting an upward pressure on processed wood prices, he went on.
In fact, the situation right now is calmer in the sense that there has been less panic consumption this summer, than last year.
"The price of electricity and the price of natural gas will certainly limit any price increase in wood and pellets and other types of fuel, but compared with, for example, the peak of last year, when the price of a cubic meter could even reach the €120-mark, the current price is actually considerably lower," Liivak said
Nonetheless, the price of pellets has already increased by 15-20 percent over the past month-and-a-half, he noted.
High natural gas prices last year were also behind large-scale consumption of wood chippings as an alternative fuel at some district heating plants.
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Editor: Andrew Whyte, Mari Peegel
Source: 'Vikerhommik', interviewers Marju Himma and Taavi Libe.
