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Since the beginning of the year, things have been looking a bit brighter for Swedish sawmills that have been able to deliver goods, significantly reduce their inventories, and implement some cautious price increases. Production and shipment continued smoothly until April when the market situation started to cool down again. Now, all actors in the Swedish timber industry are signaling a more subdued demand and further demands for price reductions. It is likely the second wave of price pressure that we are seeing now.<\/span><\/p>\n In the first wave, it was the Swedish renovation market that declined while larger construction projects continued with previously placed orders. Now, even the professional market in Sweden is drying up, which puts further downward pressure on timber consumption. The big question is whether there is room for price reductions in the Swedish market. Many Swedish sawmills are currently operating with red figures, and the raw material does not appear to be getting any cheaper.<\/p>\n Timber shortage reduces production in Sweden<\/strong><\/p>\n As mentioned earlier, the minor price increases this spring in the Swedish market are not based on increased demand but rather on reduced supply. This is partly due to the disappearance of Russian timber volumes from the Swedish market and the loss of FSC certification, which makes it more difficult for Swedish sawmills to go through another transit country. Additionally, we are witnessing a significant timber shortage in large parts of the Swedish softwood forest belt. Canadian sawmills have shut down many operations due to bark beetle outbreaks and low timber prices. Central European sawmills have reportedly significantly reduced production. Swedish and Nordic sawmills have also temporarily halted production simply because they lack timber supply.<\/p>\n Weak markets in the Nordic region, Egypt, the USA, and China<\/strong><\/p>\n It appears that the Nordic timber market, including Sweden, is the weakest, which is particularly challenging for Swedish sawmills specialized in domestic consumers. The USA, which has been a driving force for many Swedish sawmills in recent years, has significantly slowed down. Although freight prices have dropped considerably, few Swedish sawmills are making a profit from their US business. Egypt has been a significant market for Swedish spruce sawn timber for a period, going from very poor to a good market, which has eased the pressure on Swedish spruce sawmills. However, with large inventories and a shortage of USD, it seems that the situation in Egypt is heading back to being poor again. China is currently importing extremely cheap Russian timber, but inventories are high, and consumption is low at the moment.<\/p>\n Clear timber shortage as all Swedish sawmills invest in increased production<\/strong><\/p>\n The signals of a timber shortage are now becoming frequent even in the Swedish timber market. At the same time, we can observe that practically all actors in the Swedish timber industry are making significant investments in their sawmills. The focus is on efficiency, precision, and exchange, but these investments also mean increased production in Sweden. This is happening at a time when everything indicates that it will be challenging to significantly increase timber extraction from Swedish forests in the next decade. The equation simply does not add up, and all signs point to increased competition among Swedish sawmills and an eventual increase in closures.<\/p>","protected":false},"excerpt":{"rendered":" Since the beginning of the year, things have been looking a bit brighter for Swedish sawmills that have been able to deliver goods, significantly reduce their inventories, and implement some cautious price increases. Production and shipment continued smoothly until April … Continue reading