The cautious optimism for a weak recovery from the global recession that emerged in late Q4 2024 has faded as 2025 has progressed. Since Donald Trump\u2019s inauguration as US president in November 2024, the political agenda pursued by Washington has generated significant instability in the global economy. The wood products market worldwide has been heavily affected.<\/p>\n
United States \u2013 promises not yet fulfilled<\/strong><\/p>\n The optimism for housebuilding present at the time of Trump\u2019s inauguration\u2014driven by expectations of lower taxes for businesses and consumers\u2014has now been dampened. High tariffs on external trade, their inflationary impact within the US, and the failure to lower interest rates have weighed heavily on American consumers\u2019 house-buying behavior. The relatively high threshold for entering the housing market has been maintained for the large proportion of first-time buyers.<\/p>\n Tariffs imposed in various forms against the EU, China, and others have strongly impacted the economy and hit the wood products industry hard. This is not the sole reason for the difficult situation in construction worldwide, nor for the weak profitability of sawmills in many exporting countries.<\/p>\n China \u2013 from traction locomotive to brake pad<\/strong><\/p>\n China, a stable outlet for European producers over the past 10\u201315 years, is now struggling with major structural problems. The property boom that began in the early 1990s has ended. A surplus of empty apartments, a sharp fall in new construction, and speculative losses have undermined household consumption.<\/p>\n Despite active state stimulus, domestic demand remains weak, and combined with US tariffs, overall economic growth is far below the levels of the past 20\u201330 years. The downturn in housing construction has hurt wood consumption, reducing demand for imported spruce and pine. Imports of European pine have been especially affected, while Russian exporters have managed to expand their share in a shrinking Chinese market. With fewer options due to international sanctions, Russia now accounts for 70% of China\u2019s already reduced softwood imports.<\/p>\n Middle East and North Africa \u2013 glimmers of light with reservations<\/strong><\/p>\n In the Middle East and North Africa, underlying consumption has been stronger. In Morocco, construction is active, boosted by preparations for hosting the World Cup. Egypt and Algeria face significant housing needs, and their capacity to meet them depends on oil prices. For much of 2025, strong USD inflows supported demand, but Algeria has recently reintroduced import licenses for wood products, limiting trade.<\/p>\n At the same time, weak consumption in other key markets\u2014China, Europe, and domestic markets of major producers\u2014has redirected large volumes of wood products to the region. Stocks are piling up at import level, pushing prices down and squeezing profitability for exporters from Scandinavia and elsewhere.<\/p>\n Europe \u2013 interest rate cuts that are not enough<\/strong><\/p>\n In Europe, interest rates have gradually been lowered, which has had some positive effects on construction and renovation. Forecasts, however, suggest only modest improvement, far from what would be required for a strong recovery.<\/p>\n Central European sawmills, heavily dependent on their home markets, are producing at significantly reduced levels, pressured by high raw material costs and weak product prices. The ongoing tariff debate\u2014currently pointing to 15%\u2014has added uncertainty and prolonged recessionary conditions.<\/p>\n There are some positive signs in individual markets, such as Germany, where order intake has improved. Yet supply to European markets has increased as exports to China and other destinations have weakened, intensifying competition and putting further pressure on prices.<\/p>\n Sweden and other export-driven producers \u2013 caught between exports and weak domestic demand<\/strong><\/p>\n Export-dependent sawmill industries, such as those in Sweden and Finland, are particularly exposed to these shifts. Domestic markets still account for a large share of consumption\u2014about 30% in Sweden, for example\u2014making them among the most important outlets despite being overshadowed by exports.<\/p>\n Construction markets at home and in neighboring Europe have declined sharply since the pandemic highs. Although there are slight signs of recovery in new construction and renovation, demand remains well below historical averages.<\/p>\n The price gap that cannot be covered<\/strong><\/p>\n The global timber market in 2025 has been characterized by oversupply and depressed prices, pushing sawmills into a tight corner. In Europe, pine products in particular have faced downward price pressure, while supply of spruce has contracted.<\/p>\n There is evidence that prices bottomed out in Q3 2025, with some upward corrections in Q4\u2014not because of strong demand but due to reduced supply and sawmills\u2019 weak profitability forcing adjustments.<\/p>\n Still, a large gap persists between timber prices and the prices of sawn products, eroding profitability for producers worldwide. The outlook suggests that the broader economy may strengthen in 2026, which could provide some relief and upward momentum for wood product prices later in 2025 and beyond.<\/p>\n What happens next?<\/strong><\/p>\n With current cost and market conditions, production cuts and other measures are likely unless demand and raw material balances shift. Historically, the wood products industry has shown that even small changes in supply-demand dynamics can quickly alter market conditions. The volatility of recent years is expected to continue shaping the global outlook.<\/p>","protected":false},"excerpt":{"rendered":"","protected":false},"author":1,"featured_media":50737,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[5204],"tags":[3350,5819,3429],"class_list":["post-96842","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-daily-news","tag-global","tag-wood-price","tag-wood-products","topic-forestry","topic-lumber","topic-sawmilling","topic-statistics","topic-wood-products","area-africa","area-asia-middle-east","area-australia-and-pacific-region","area-china","area-europe","area-global","area-north-america","area-russia","area-south-america"],"acf":[],"yoast_head":"\n