Uncertainty in global markets and weak economic growth are expected to weigh on Finland\u2019s forest industry in the coming years. Export values are still increasing, but overcapacity remains a persistent issue in cardboard and graphic paper markets. At the same time, the war in the Middle East is pushing transportation costs higher, according to Pellervo Economic Research PTT.<\/p>\n
\u201cThe general economic momentum remains weak and does not support demand growth for forest industry products. The war and the closure of the Strait of Hormuz are increasing transportation costs. Due to higher fuel prices, logistics companies have introduced fuel and risk surcharges for shipments to the Middle East,\u201d said forest economist Matti Valonen.<\/p>\n
The impact is most visible in Finland\u2019s sawmill sector, where around 9% of exports go to the Middle East. In contrast, only a small share of chemical forest industry exports is exposed to the region. The outlook assumes the active phase of the conflict will end by late April, although cost pressures are expected to persist.<\/p>\n
Exports continue to grow despite pressure<\/strong><\/p>\n The value of Finnish forest industry exports is forecast to increase by 2% this year, with growth across most product categories except paper. Sawn timber and pulp are expected to lead gains, with sawn timber rising by nearly 8% and pulp by just under 5%. In 2027, plywood exports are projected to see the strongest growth, supported by the ramp-up of Mets\u00e4 Group\u2019s LVL production.<\/p>\n Sawn timber growth slows<\/strong><\/p>\n After strong growth last year, sawn timber export growth is expected to slow. Construction activity in Europe and the United States is recovering gradually, while demand in Japan and China remains subdued.<\/p>\n The Middle East conflict may temporarily limit exports, although volumes are expected to recover later in the year. Finnish sawn timber exports are forecast to increase by around 4%, supported by moderate construction activity and reduced output in Central Europe.<\/p>\n Canada\u2019s efforts to expand exports beyond the U.S. could also influence market dynamics.<\/p>\n \u201cIncreased Canadian exports would intensify competition in key markets for Finland, potentially reducing Finnish export volumes,\u201d Valonen noted.<\/p>\n Plywood supported by trade measures<\/strong><\/p>\n Plywood demand is benefiting from gradual recovery in construction, although weak conditions in the European automotive sector are limiting growth. Exports to the U.S. are constrained by a 15% import tariff.<\/p>\n However, Finnish producers are supported by EU anti-dumping duties on plywood imports from China and Brazil.<\/p>\n Overcapacity weighs on board markets<\/strong><\/p>\n Adjustments in capacity are ongoing. The closure of Mets\u00e4 Board\u2019s Tampere mill has slightly reduced output, while Stora Enso\u2019s new packaging board line in Oulu is increasing production. Overall board exports are expected to remain close to last year\u2019s level.<\/p>\n Demand remains weak, with excess capacity affecting all regions. Finnish producers are likely to continue temporary shutdowns to manage supply. Export prices for paperboard are expected to remain stable this year, while shipments to the United States may decline slightly due to tariffs.<\/p>\n Paper production continues to decline<\/strong><\/p>\n Paper output and exports are falling following closures of coated magazine paper capacity by UPM and Sappi. Demand for graphic paper in Europe dropped sharply last year, leaving significant overcapacity.<\/p>\n Producers are preparing structural changes. UPM and Sappi have signed a letter of intent to combine printing and writing paper operations into a joint venture, including several Finnish mills. Even with a modest economic recovery in Europe and the U.S., production levels are expected to remain broadly unchanged next year.<\/p>\n Pulp prices supported by supply constraints<\/strong><\/p>\n Stocks of softwood pulp in European ports declined at the end of last year, pushing prices upward, although the increase has slowed during the spring.<\/p>\n Production in Finland benefited from high electricity prices early in the year, but shutdowns have since been announced. Globally, supply remains constrained due to factors such as raw material availability issues in Canada and disruptions in Asia.<\/p>\n \u201cWhile demand for paper and board remains weak and global trade uncertain, tighter supply is offering limited support to the pulp market. Over the longer term, demand for long-fibre softwood pulp faces competition from the growing use of short-fibre pulp,\u201d said forest economist Marjo Maidell.<\/p>\n Forest industry production in Finland<\/strong><\/p>\n Source: Finnish Forest Industries Federation, PTT forecast (e) and estimate (a)<\/p>","protected":false},"excerpt":{"rendered":"","protected":false},"author":1,"featured_media":98477,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[5204],"tags":[],"class_list":["post-98476","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-daily-news"],"acf":[],"yoast_head":"\n\n\n
\n \nYear<\/th>\n Paper (million tons)<\/th>\n Pulp (million tons)<\/th>\n Board (million tons)<\/th>\n Sawn timber (million m\u00b3)<\/th>\n Plywood (million m\u00b3)<\/th>\n<\/tr>\n<\/thead>\n \n 2022<\/td>\n 3.1<\/td>\n 9.8<\/td>\n 4.2<\/td>\n 11.2<\/td>\n 1.1<\/td>\n<\/tr>\n \n 2023<\/td>\n 2.9<\/td>\n 9.2<\/td>\n 3.4<\/td>\n 10.4<\/td>\n 0.9<\/td>\n<\/tr>\n \n 2024<\/td>\n 3.0<\/td>\n 9.3<\/td>\n 3.7<\/td>\n 10.9<\/td>\n 0.9<\/td>\n<\/tr>\n \n 2025<\/td>\n 3.0<\/td>\n 9.5a<\/td>\n 3.6<\/td>\n 11.7<\/td>\n 0.9<\/td>\n<\/tr>\n \n 2026e<\/td>\n -5%<\/td>\n 0%<\/td>\n 1%<\/td>\n 2%<\/td>\n 2%<\/td>\n<\/tr>\n \n 2027e<\/td>\n 0%<\/td>\n 1%<\/td>\n 2%<\/td>\n 1%<\/td>\n 5%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n