WOOD FROM FINLND CONFERENCE: GEOPOLITICAL SITUATION CAUSING VOLATILITY ON SAWN TIMBER MARKETS
Due to Russia’s assault on Ukraine, Russian, Belarusian and Ukrainian sawn timber has exited the European markets, resulting in a shortage of more than 10 per cent. Simultaneously, the previously positive economic outlook on the main markets has become uncertain. The uncertainty resulting from the geopolitical situation is also reflected in demand for Finnish sawn timber, explained Tommi Sneck, Chairman of the Finnish Sawmills Association to a record crowd at the Wood from Finland conference held in Helsinki on 28 April 2022.
Market insecurity is heightened by the still massive impacts of the Covid-19 pandemic, for example in China. Rampant inflation and rising interest rates are eroding consumer confidence. The rise in construction material prices and the shift in the balance of material flows are impacting the markets in a way that is difficult to predict.
On the other hand, sawmills are making necessary investments for the future. According to Sneck, this is prefaced by the improvement in the sawmill industry’s profitability in 2021, making up for a lean decade.
The growth in climate awareness increases demand for wood products globally, as Kai Merivuori, the Finnish Sawmills Association’s CEO, explained at the conference. The opportunities of the Finnish sawmill industry to benefit from this development depend especially on cost development and the availability of Finnish roundwood.
The greatest threat on the overall EU market is currently the EU’s aims of restricting forest use, and at the same time also the availability of climate-friendly raw material for wood construction. If the conditions for sustainable forestry are weakened in the EU, restricting the use of timber while demand on the markets is high will lead to carbon leakage.
“We must guarantee the framework conditions for the wood processing industry,” Merivuori says.
The Finnish sawmilling industry is based largely on Finnish production inputs. The sawmilling industry has excellent opportunities for meeting the challenges set by climate change, by offering products that store carbon for a long time for a variety of end uses.
During crises, the significance of basic industry and using Finnish raw materials is highlighted. In 2021, sawn timber was Finland’s fourth largest export item. The export value of sawn timber and further-processed goods rose to EUR 2.8 billion and the stumpage earnings paid to forest owners for logs rose to EUR 1.9 billion.
CEO Kai Merivuori, tel. +358 40 532 2868, email@example.com