The outlook for Finland's forest industry is improving slightly this year.\u00a0 Sawmills are still burdened by the downturn in construction, whereas the production and export of pulp, paper, and cardboard are growing moderately. The recovery in construction and the general economic revival are expected to increase exports more noticeably over the next year. The final impact of this spring's political strikes on the forest industry's production and exports for the entire year depends on the demand in the latter part of the year, according to Pellervo Economic Research PTT's forecast for the forestry sector.<\/p>\n
\"Last year was challenging for the forest industry, and this year, especially for sawmills, is still expected to be rather subdued. Frozen construction and the general weak economic situation particularly reduce the demand for sawn timber both domestically and internationally. The situation is better in the chemical forest industry,\" says forest economist Matti Valonen.<\/p>\n
This year, political strikes also affect the production and export volume of the Finnish forest industry, causing machines to stand still at many production facilities. The losses incurred so far have already been included in the forecast, but the final impact of the strikes depends on how demand develops in the latter part of the year.<\/p>\n
\"After the political strikes end, production will be ramped up, and stocks will be cleared. If demand for end products allows, forest industry companies can partly compensate for the lost production during the strikes by increasing the operating rates of production facilities. Last year, operating rates were lower than average,\" says forest economist Marjo Maidell.<\/p>\n
Another challenging year ahead for Finnish sawmills<\/strong><\/p>\n Last year was weak for mechanical forest industry, and the same is expected this year as well. The downturn in construction both in Finland and in key export markets continues to weigh on the demand, export, and production of sawn timber and plywood. Due to the situation, prices cannot rise much faster than inflation.<\/p>\n Next year, when construction begins to recover, there is a slight improvement visible, and the export and production volume of sawn timber will increase somewhat.<\/p>\n Plywood exports decreased by 20% last year, and it would have decreased even more without the good demand from the U.S. market. Next year, plywood demand will finally recover as construction in Europe begins a cautious upward trend.<\/p>\n Positive turnaround in cardboard demand visible<\/strong><\/p>\n Cardboard production and exports fell by as much as one-fifth last year. This was due to the decline in demand following the peak caused by the pandemic, which coincided with rising inflation and reduced consumption. With the replenishment of stocks and slowly increasing demand, cardboard production and exports are expected to grow this year. Next year, the start-up of Stora Enso's consumer packaging cardboard line in the beginning of the year will further increase production and exports.<\/p>\n Sentiments in the paper market are cautious. Inventory levels of printing and writing papers have decreased, and demand is expected to slightly pick up, but it is slowed down by the weak economic development in Europe, especially in Germany. In many paper grades, there is still more supply than demand, but some producers still intend to raise prices due to increased production costs.<\/p>\n Difficulties in maritime transportation caused by the Red Sea conflict may hinder the import of paper and cardboard from Asia to the Middle East and Europe, which could strengthen the position of European production.<\/p>\n Kemi plant increases Finland's pulp production and exports<\/strong><\/p>\n Pulp production remained at the same level as the previous year, while production of mechanical and semi-chemical pulps decreased by one-fifth. Sixty percent of pulp was exported, indicating a decrease in its further processing domestically and increased demand for pulp in paper or cardboard production internationally.<\/p>\n This year, pulp production and exports will grow, although growth will be restrained by the explosion at the Kemi bioproduct mill in March and the production stoppage extending to June. Export will also be reduced by the closure of the Sunila pulp mill last May. The amount of domestically processed pulp increases compared to last year.<\/p>\n <\/p>","protected":false},"excerpt":{"rendered":" The outlook for Finland’s forest industry is improving slightly this year.\u00a0 Sawmills are still burdened by the downturn in construction, whereas the production and export of pulp, paper, and cardboard are growing moderately. The recovery in construction and the general … Continue reading