What is moving the price right now?

The September index is still outstanding, so the August reading governs this cycle: the HPE index for solid wood for pallets stands at 110.29 points, unchanged on the month and up 15.5 percent year on year. Our derived EUR 1 indicator therefore stays at 12.21 EUR per unit.

A correction is due on the used side. We described grades B and C as oversupplied and drew a ceiling argument from it. On 30 July EUWID reported the opposite: prices for used pallets rose noticeably, and the gap between supply and demand in the used segment widened further in the preceding weeks. The used market is therefore no longer a buffer but a bottleneck in its own right, and that changes the substitution calculation for anyone who has been budgeting used stock as the cheap fallback.

New-pallet demand, by contrast, is quiet. In early September it sat at seasonally typical low levels; many customers held back orders or were on summer holiday in southern Germany, and the August improvement in the ifo business climate had not yet reached demand for transport equipment (EUWID, 3 September). That confirms our reading that the pre-buying impulse around the PPWR date of 12 August has faded.

On the cost side, however, pressure is building from two directions. First, roundwood: third-quarter contracts run firm at 125 EUR/fm net at WBV Landshut and 128 EUR/fm net at WBV Mitterfels through the end of September, with beetle-damaged wood 20 EUR/fm below in each case. The relief we expected for September has not arrived. Second, energy: on 13 September EUWID reported that the rise in European gas spot prices under way since late June continues. Kiln drying and ISPM 15 heat treatment are the direct transmission channels into pallet costing.

Structurally, consolidation continues: on 11 September France's PGS Group took a stake in Dutch pallet manufacturer Lecaro B.V., its third holding in the Dutch pallet sector after Den Doelder Pallets and Hoekmann Houtindustrie. For buyers, every consolidation round means fewer independent suppliers in the Benelux sourcing area.

What we watch: the September index once published, the Q4 roundwood round from October, used-pallet availability, and the gas price as a drying cost driver.

What does this mean for procurement in Europe?

Recalculate the used-pallet option. If you have planned used pallets as the cheap fallback volume, test that assumption now: EUWID reports noticeably higher used prices and a widened supply gap. Contract the used volumes you actually need with a committed quantity rather than on an ad hoc basis, and recalculate the differential against new pallets before carrying it into annual planning as a given.

Use the demand window, but do not expect a price cut. New-pallet demand in early September was seasonally low, which is the best moment for frame negotiations and for bundling volumes into full truckloads rather than single-unit purchases. Do not expect discounts out of the timber base, though: Q3 contracts run firm to the end of September and energy costs are rising.

Require separate disclosure of timber, energy and treatment components. That is exactly where the negotiable part sits. The timber share is contracted to the end of September and immovable; the energy and ISPM 15 component, by contrast, can be linked to an observable index, with an adjustment interval and an expiry date working in both directions.

Keep anchoring standard Euro pallets to the HPE index, and set the clause while the index is standing still. August was the second month without an increase, and the Q4 roundwood round from October will decide which way it breaks. A clause with explicit participation in falling values is easier to win now than after another rise.

Watch the supplier structure in the Benelux region. With PGS's third Dutch holding, the number of independent manufacturers continues to shrink. If you source there, keep the supplier base deliberately broad and have at least one alternative outside the consolidating groups qualified.