After a low point last year, Finnish sawmills have seen a modest recovery in both production and exports of softwood lumber. Yet that growth is now being overshadowed by new waves of geopolitical instability \u2014 most recently, U.S. tariffs on Vietnam that have abruptly halted lumber trade there.<\/p>\n
Furniture made from Nordic wood is often manufactured in Vietnam for the U.S. market. Now, that trade has come to a standstill.<\/p>\n
Over the past 12 months, Finnish sawmills produced around 11 million cubic meters of softwood lumber. Of that, roughly 2 million cubic meters remained in Finland while the rest went to export markets. According to Finnish Customs data, February\u2019s export prices averaged \u20ac250\/m\u00b3 for spruce and \u20ac234\/m\u00b3 for pine.<\/p>\n
\u201cIf you compare it to a year ago, the market has moved forward. The bottom has been reached, but construction and production are still slow and sluggish,\u201d says Ville Kopra<\/strong>, CEO of Versowood Oy<\/strong>.<\/p>\n He notes that Finnish producers may have gained some market share even without significant growth in global consumption.<\/p>\n \u201cGoods are moving better than a year ago. We\u2019ve moved from braking to free gear,\u201d Kopra says.<\/p>\n North Africa and Central Europe drive growth<\/strong><\/p>\n Customs data show that Egipt<\/strong> was the top buyer of Finnish pine softwood lumber<\/strong> in February, while Estonia<\/strong> led in imports of Finnish spruce<\/strong>, filling a gap left by vanished Russian supplies. In Estonia, much of that lumber is used in export-oriented single-family home construction.<\/p>\n Germany has also played a key role in driving growth in recent months, along with steady demand in Algeria<\/strong> and Morocco<\/strong> \u2014 important pine markets in North Africa<\/strong>.<\/p>\n Falling inflation and interest rates in Europe have created cautious optimism, but global instability continues to cast a long shadow. \u201cIn my own history, I don\u2019t remember ever having so much going on at the same time: a trade war, the war in Ukraine, the Middle East, India and Pakistan, China and Taiwan,\u201d Kopra says. \u201cI have to hope that this is it for now.\u201d<\/p>\n Geopolitics stretch logistics and shrink exports<\/strong><\/p>\n Global tensions are also disrupting trade routes. European softwood lumber bound for Asia<\/strong> is still being rerouted around Africa as shipping companies avoid the Suez Canal due to security threats from Yemen\u2019s Houthi rebels \u2014 lengthening delivery times for European exporters.<\/p>\n Softwood lumber exports to China<\/strong>, once a key growth market, have declined sharply. In January\u2013April, Finland exported about 127,000 cubic meters of softwood lumber to China \u2014 a drop of 57% compared to the same period last year.<\/p>\n While China\u2019s imports have declined overall, the fall has been steeper for Finland than other suppliers. According to Holzkurier<\/strong>, Sweden<\/strong> has now overtaken Finland as China\u2019s fourth-largest softwood lumber supplier, behind Russia<\/strong>, Belarus<\/strong>, and Canada<\/strong>.<\/p>\n Russia remains China\u2019s largest supplier by far, exporting 3.5 million cubic meters of softwood lumber in the first half of the year \u2014 despite facing Western sanctions.<\/p>\n Kopra says Finnish exporters are eager to see trade with China rebound, particularly in autumn when European construction activity slows.<\/p>\n \u201cWe have our own agent and customer base there, we are constantly in touch. But there is just no common price vision. There is a lot of uncertainty, consumption is not normal.\u201d<\/p>\n The strengthening of the Swedish krona<\/strong> this year has improved Finland\u2019s competitive position in export markets. At the start of the year, the euro was worth 11.5 krona. It now stands below 11.<\/p>\n Vietnam shuts down under U.S. tariffs<\/strong><\/p>\n One of the most direct impacts of U.S. trade policy has been seen in Vietnam<\/strong>, a country that imports Nordic lumber for furniture production aimed at the U.S. market. New tariffs imposed by Donald Trump have brought that trade to a halt.<\/p>\n \u201cTariffs will have indirect effects, even if they are not directly visible to us. They will soon be visible in the next step,\u201d says Kopra.<\/p>\n High log prices add pressure<\/strong><\/p>\n Despite the still weak market for softwood lumber, Finnish log prices remain high. According to the Finnish Forest Industries Association<\/strong>, the four-week average stumpage price for spruce and pine logs in final felling<\/strong> has exceeded \u20ac86\/m\u00b3.<\/p>\n \u201cIt is inexplicable why the price of logs has risen so high. The market situation does not support it in any way,\u201d Kopra says.<\/p>\n \u201cWe've managed to buy our own, but it's a bit scary when you can't tell by a hair\u2019s breadth where the market will turn. If it does go negative, it's really annoying to work with expensive trees when you know you'll make a loss. You would always expect more moderate development in one direction or another.\u201d<\/p>","protected":false},"excerpt":{"rendered":" After a low point last year, Finnish sawmills have seen a modest recovery in both production and exports of softwood lumber. Yet that growth is now being overshadowed by new waves of geopolitical instability \u2014 most recently, U.S. tariffs on … Continue reading