Finland\u2019s sawmills continued to face weak demand and high operating costs in the third quarter of 2026, as subdued housing construction limited lumber sales at home and across major European markets. Selling prices have provided little relief from expensive logs and transport, keeping profitability under pressure.<\/p>\n
Lumber production reached approximately 8.7 million m\u00b3 in January\u2013September, down 1% from the same period last year. Output increased slightly year on year in the third quarter, but the improvement was insufficient to reverse the decline over the first nine months. Recent investments have expanded and modernised production facilities, although weak market conditions have prevented mills from making full use of that capacity.<\/p>\n
According to the Finnish Sawmills Association\u2019s latest business review, published on November 9, exports of lumber and other sawmill wood products totalled approximately 5.9 million m\u00b3 in January\u2013August. That was around 207,000 m\u00b3, or 3%, below the corresponding 2025 period. Export revenue declined by 1% to \u20ac1.3 billion, with limited selling-price gains failing to compensate for the industry\u2019s high costs.<\/p>\n
Tino Aalto, managing director of the association, said housing construction had yet to recover in Finland or the major European markets that underpin lumber demand. Where construction activity had increased, it had not translated into stronger lumber consumption.<\/p>\n
\u201cThe situation is difficult for companies because costs remain high,\u201d Aalto said.<\/p>\n
Transport and harvesting costs rise<\/strong><\/p>\n Finland\u2019s dependence on overseas customers leaves its sawmills particularly exposed to freight costs and disruptions in international trade. Approximately 80% of production is exported to more than 70 countries, with long distances to key markets adding to delivery expenses.<\/p>\n Logistics account for approximately 15% of a sawmill\u2019s total costs, while harvesting represents a further 8%, according to the review. Domestic fuel prices were 52% higher year on year in September, contributing to a 17% increase in transport costs. The association reported comparable increases in export transport costs.<\/p>\n Fuel costs in harvesting rose even more sharply, by 66%, while overall harvesting costs increased by approximately 12%.<\/p>\n Aalto said Finnish mills compete directly with producers in other countries, making long transport distances and high logistics costs a substantial disadvantage. International trade uncertainty and geopolitical tensions have continued to put pressure on those costs.<\/p>\n High log prices squeeze processing margins<\/strong><\/p>\n Log prices remain another major constraint on profitability. Lumber export prices have not kept pace with raw material costs, leaving mills exposed to expensive inputs despite prolonged weakness in their end markets.<\/p>\n Aalto acknowledged that recent log-price developments had benefited forest owners, while arguing that processors\u2019 financial position had become increasingly difficult. He said the industry\u2019s operating conditions needed to be assessed against the prices and demand available in international lumber markets.<\/p>\n The association argues that forest owners also have a long-term interest in maintaining profitable domestic processing capacity, which supports demand for Finnish wood, investment and future timber sales.<\/p>\n \u201cIt is also in forest owners\u2019 long-term interest that Finland has a strong sawmill industry,\u201d Aalto said.<\/p>\n Housing recovery remains elusive<\/strong><\/p>\n Finland\u2019s apparent domestic lumber consumption was approximately 2.2 million m\u00b3 in the 12 months to August. Weak housing construction remains a principal reason for the low level of demand.<\/p>\n Infrastructure and data-centre projects have supported Finnish construction activity, but residential building remains exceptionally subdued. Elsewhere in Europe, the recovery in construction has also been slow, while the region\u2019s sawmill production has contracted substantially in recent years, the association said.<\/p>\n Aalto sees no rapid improvement in market conditions. He nevertheless said Finland\u2019s recent sawmill investments would put producers in a stronger position when demand eventually recovers, provided operating costs remain competitive and mills can secure sufficient raw material supplies.<\/p>","protected":false},"excerpt":{"rendered":" Finland\u2019s sawmills continued to face weak demand and high operating costs in the third quarter of 2026, as subdued housing construction limited lumber sales at home and across major European markets. Selling prices have provided little relief from expensive logs … Continue reading