Where are the log prices going?

Over the past 18 months Scion has been collating six log price outlooks by prompting a range of people to share their personal views on the markets. The majority of participants are either forest owners, managers, wood processors, traders, consultants or people in forestry related industries abroad. In our last run we asked everybody to what extent do they find this information valuable? It turns out that although the accuracy of the log price outlook is far from perfect, the information is indeed useful to a range of people.

Most people echoed that it is valuable to see what others are thinking. They also find the information interesting since people across the value chain participate, often including parties who negotiate prices among each other. Even the word-clouds (see below) that display the most prominent current drivers in the markets seem to make their way into presentations to help explain the current state of affairs. Some people have also used the outlooks to assist them with budgeting for the following financial year. This outlook started off as a small experiment to see if traders and other price negotiators would share information if their identities are protected. In an environment where price negotiations are relatively non-transparent, this type of forecast does indeed seem to have some value.

The word-clouds below display the most important drivers in February 2015 and February 2016.

February 2015

February 2016

The graphs below show that both unpruned and pruned log prices are currently trading higher than what most people expected over the past 12 months.

The next log price outlook is open from 16 to 31 May. We encourage as many people as possible to participate. More than one person from the same company are welcome to cast their votes.

Please note that the final outcome will be shared at the beginning on June exclusively with those who have participated in the outlook.

To participate in the new log price outlook go to: https://www.surveymonkey.com/r/LPO-May2016

Feel free to forward this information to others who may be interested.

For feedback and more information contact: carel.bezuidenhout@scionresearch.com