What is moving the price right now?

The HPE index for solid wood for pallets fell in September for the first time this year. According to the release of 18 September it stands at 110.19 points, down 0.1 percent on August. The annual rate fell from 15.5 to 13.6 percent. Our derived EUR 1 indicator eases accordingly to 12.20 EUR per unit, after 12.21 EUR the month before. Since June the index has moved between 109.88 and 110.29 points: pallet timber has reached its peak for now, but it is not falling.

The roundwood side offers no relief yet. The third-quarter contracts expire on 30 September, and WBV Mitterfels still lists 128 EUR/fm net for spruce 2b+ B/C. Fourth-quarter prices had not been published as of 28 September. The Q4 round from October decides whether the slight decline in the index marks the start of a sideways phase or only a pause.

The costs between timber and finished pallet are rising instead. EUWID reported on 24 September that the rise in European gas spot prices became even more pronounced in the first half of September; the TTF front month stood at 72.07 EUR/MWh on 25 September. Drying and ISPM 15 heat treatment are the direct transmission channels. Logistics are also getting more expensive: the daily mean at the Kaub gauge fell to 5.8 cm on 24 September and was below zero on 26 and 27 September (WSV), the lowest level since 1880 (Bloomberg). Timber and pallets moving via the Rhine run with partial loads or switch to rail and road.

The industry is reorganising. Pallet makers have founded the Wood Pallets for Europe alliance in Brussels, focusing on the circular economy and EU legislation (EUWID, 18 September). After the PPWR reuse requirement took effect on 12 August, this signals that manufacturers want a say in the next steps. In pooling, a major provider is changing hands: funds advised by Apax are selling Tosca to Goldman Sachs Alternatives (EUWID, 14 September). For pool system customers nothing changes in the short term; in the medium term it is worth checking terms at contract renewals.

There has been no new market report on the used segment since 3 September. EUWID last reported noticeably higher prices and a widening supply gap on 30 July; new-pallet demand was seasonally low in early September.

What we watch: Q4 roundwood prices from October, the HPE October index, the next EUWID price review in early October and the Kaub gauge.

What does this mean for procurement in Europe?

Use the first decline as a negotiating argument. The HPE pallet index falls in September, and the annual rate drops clearly. A supplier asking for a further wood surcharge now has to justify it against a falling index. For every demand, require a reference to the HPE value and a breakdown into timber, energy, treatment and logistics.

Set the index clause now, with participation in falling values. The timing is favourable: the index has peaked, but the Q4 roundwood round is still open. A clause with the HPE monthly value as the anchor, a narrow band and explicit pass-through of declines is easier to secure before the Q4 deals than after.

Separate energy and low water from the wood share. Both cost blocks are rising and justifiable, but they belong itemised separately. Link an energy surcharge to a reference index with an adjustment interval and expiry date, and a low-water surcharge to the official Kaub gauge with automatic expiry above a fixed level.

Keep treating the used option with caution. Since July there has been no report that the supply gap for used pallets has closed. Secure the used volumes you need with volume commitments, and do not calculate the gap to new pallets with spring values.

Bundle volumes while demand is quiet. According to market overviews, new pallets cost around 10 to 13 EUR per unit by full train load and 21.50 to 28.90 EUR for single purchases. With seasonally low demand, now is the time to bundle framework volumes for the fourth quarter and the first half of 2027 and to manage call-offs through fixed delivery windows instead of ordering single volumes at short notice.

Plan logistics reserves. With the Kaub gauge around zero, Rhine transports run with partial loads or shift to rail and road. Keep a safety stock of pallets for critical sites and clarify with your suppliers who carries the extra cost of switching.

Review pooling contracts before renewal. With the change of ownership at Tosca and continued consolidation among manufacturers, it pays to check terms, durations and notice periods now and to keep at least one alternative qualified.