Sweden\u2019s timber market may be entering a different phase in the relationship between forest owners and the processing industry. Sveaskog CEO Erik Brandsma (in the photo above) says the state-owned forest company is increasingly prepared to use its supply position to balance the market, rather than treating maximum timber deliveries to industry as an objective in itself. At the same time, he sees some overcapacity in Swedish sawmilling and expects consolidation.<\/p>\n
Brandsma made the comments in a wide-ranging interview for a Swedish forestry podcast, discussing Sveaskog\u2019s role in the timber market, sawlog prices, timber purchasing, the effects of storm Johannes and the longer-term competitiveness of Sweden\u2019s forest industry.<\/p>\n
The shift comes at a time when the Swedish market is dealing with the effects of storm Johannes. Brandsma describes a combination of relatively lower timber prices, very large inventories at sawmills and low prices for finished softwood lumber. In such conditions, Sveaskog sees room to adjust its behaviour as a supplier rather than simply continuing to release timber into an already well-supplied market.<\/p>\n
For sawmills, cheaper logs can provide immediate relief when finished softwood lumber prices are weak. For forest owners, however, falling sawlog prices reduce returns and can weaken the incentive to harvest. Brandsma argues that Sveaskog's role is not to push this relationship as far as possible in either direction, but to find a price and supply balance that works over a longer period.<\/p>\n
Low lumber prices meet high sawmill inventories<\/strong><\/p>\n The immediate market problem described by Brandsma is straightforward.<\/p>\n Storm Johannes has contributed to relatively lower timber prices while creating what he calls an \"enormous\" inventory at sawmills. At the same time, finished softwood lumber prices are relatively low.<\/p>\n This creates an uncomfortable equation for the sawmill industry. Additional raw material may be available at lower prices, but mills still have to sell their output into a weak softwood lumber market while carrying substantial inventories.<\/p>\n Brandsma's comments suggest that Sveaskog does not see increasing timber supply under those conditions as necessarily desirable.<\/p>\n He contrasts the current approach with an earlier perception of Sveaskog under which, when timber prices were low, the company could simply increase harvesting in order to achieve its financial objectives. In the new approach described in the interview, low prices can instead be a signal to \"pull the handbrake\" and allow the market to adjust.<\/p>\n Timber prices are therefore treated as a market signal affecting harvesting and supply decisions, rather than lower prices automatically being compensated for through higher volumes.<\/p>\n Sveaskog also has some flexibility in how it operates in the market. Brandsma explains that the company works with a mixture of longer-term agreements and contracts covering roughly six months, giving it scope to react to market developments.<\/p>\n In the present situation, that means potentially using supply decisions to help balance a market characterised by high sawmill stocks and weak softwood lumber prices.<\/p>\n Sveaskog wants to defend timber prices \u2013 within limits<\/strong><\/p>\n Brandsma is also explicit about which side of the timber transaction Sveaskog now represents.<\/p>\n As a forest owner, he says, Sveaskog is on the side of forest owners and wants to keep timber prices at a reasonable level. But prices cannot be maintained at a level that ultimately forces processing companies out of business.<\/p>\n Such an outcome would not benefit forest owners either.<\/p>\n The objective is therefore not simply higher sawlog prices. It is what Brandsma describes as an optimal balance between the economics of forestry and those of the processing industry.<\/p>\n The pressure in the current Swedish market is coming from both ends of the value chain. Timber prices have moved lower, but the processing industry is simultaneously confronted with weak softwood lumber prices and large inventories.<\/p>\n Lower raw-material prices do not automatically solve the sawmills' problem if the imbalance lies in the lumber market.<\/p>\n Cheap logs are not necessarily good for Swedish sawmills<\/strong><\/p>\n Perhaps the most interesting part of Brandsma's argument is his rejection of the assumption that the Swedish forest industry should always seek the lowest possible raw-material cost.<\/p>\n His reasoning is that a competitive processing industry should receive raw material at a price that encourages innovation, efficiency and competitiveness.<\/p>\n Supplying timber too cheaply, he argues, can have the opposite effect: over time, it can create an industry that does not develop sufficiently and therefore becomes less competitive.<\/p>\n From the perspective of an individual mill, a reduction in log costs improves the conversion margin between raw material and finished lumber, all else being equal. Brandsma is looking further along the cycle. If cheap timber protects inefficient capacity from market pressure, the benefit of lower raw-material costs can eventually become a structural weakness.<\/p>\n Later in the interview, the same argument is taken further: higher raw-material prices can force processors to move further up the value-added chain rather than remaining concentrated in basic products.<\/p>\n For the sawmill sector, Sveaskog does not consider its role to be supplying cheap logs simply to protect existing industrial capacity.<\/p>\n Some overcapacity in Swedish sawmilling<\/strong><\/p>\n Brandsma believes Sweden already has more sawmill capacity than the market may require.<\/p>\n He describes the Swedish sawmill industry as strong and competitive, but adds that there is \"perhaps some overcapacity\" and that some consolidation will probably be needed.<\/p>\n If sawmill capacity exceeds what can economically be supported by raw-material availability and softwood lumber demand, lowering sawlog prices to preserve all existing capacity would merely postpone the adjustment.<\/p>\n Brandsma instead appears to favour a market in which raw-material pricing remains sufficiently firm to reward forest owners and force processors to remain competitive, while avoiding price levels that would unnecessarily destroy viable industrial capacity.<\/p>\n This makes consolidation part of the adjustment mechanism rather than something that should necessarily be prevented through cheaper timber.<\/p>\n Brandsma nevertheless expresses considerable confidence in Swedish sawmilling. His assessment is not that the sector is fundamentally uncompetitive, but that a strong and competitive industry may still have excess capacity that needs to be addressed.<\/p>\n Large regional price differences remain<\/strong><\/p>\n The interview also highlights substantial regional differences in Swedish timber prices.<\/p>\n Brandsma says price levels can vary enormously across Sweden and argues that, in a properly functioning market, such differences should eventually narrow as buyers shift procurement towards cheaper areas. Forestry makes that adjustment slower than in many other commodity markets, but buyers can still move towards areas offering more attractive raw-material prices.<\/p>\n Sveaskog sees its timber purchasing operation partly as a way of improving that market function.<\/p>\n The company continues to buy timber from private forest owners even though it no longer owns the same downstream industrial operations it once did. Brandsma says this provides Sveaskog with a better understanding of the market and can increase competition and efficiency in regions where the timber market does not function perfectly.<\/p>\n The financial significance for forest owners can be considerable. Brandsma gives the example of being able to offer a private forest owner SEK 200\/m\u00b3 (around \u20ac18\/m\u00b3) more by exploiting regional market differences, describing that as a very large difference for the seller.<\/p>\n Sveaskog has also occasionally moved timber geographically to exploit imbalances. Brandsma mentions two shiploads moved the previous summer where there was surplus in one area and demand and better prices elsewhere. Following storm Johannes, some timber was also shipped to Germany or the Baltic region, although he stresses that these are very small transactions rather than a core part of Sveaskog's business.<\/p>\n Swedish sawlog stocks fall, but remain above Q2 average<\/strong><\/p>\n Swedish Forest Agency figures show that softwood sawlog inventories stood at 3.5 million m\u00b3f ub at the end of June 2026, down 23% from the previous quarter. Stocks nevertheless remained above the five-year Q2 average of 2.6 million m\u00b3f ub.<\/p>\n Pulpwood inventories declined 4% to 5.2 million m\u00b3f ub, while pulp-chip stocks increased 19% to 1.0 million m\u00b3f ub. Total industrial stocks of softwood sawlogs, pulpwood and pulp chips amounted to 9.7 million m\u00b3f ub, 1.1 million m\u00b3 below the previous quarter.<\/p>\n The regional figures show a different development in the area most affected by storm Johannes. In timber balance region 2, softwood sawlog inventories increased 15% during Q2 to 1.38 million m\u00b3f ub, while pulpwood stocks rose 42% to 1.40 million m\u00b3f ub.<\/p>\n Sweden\u2019s timber market may be entering a different phase in the relationship between forest owners and the processing industry. Sveaskog CEO Erik Brandsma (in the photo above) says the state-owned forest company is increasingly prepared to use its supply position … Continue reading \n\n
\n \nProduct<\/th>\n Stocks at 30 June 2026<\/th>\n Change vs Q1<\/th>\n Five-year Q2 average<\/th>\n<\/tr>\n<\/thead>\n \n Softwood sawlogs<\/strong><\/td>\n 3.5 million m\u00b3f ub<\/strong><\/td>\n -23%<\/strong><\/td>\n 2.6 million m\u00b3f ub<\/td>\n<\/tr>\n \n Pulpwood<\/strong><\/td>\n 5.2 million m\u00b3f ub<\/td>\n -4%<\/td>\n 5.0 million m\u00b3f ub<\/td>\n<\/tr>\n \n Pulp chips<\/strong><\/td>\n 1.0 million m\u00b3f ub<\/td>\n +19%<\/td>\n 1.0 million m\u00b3f ub<\/td>\n<\/tr>\n \n Total<\/strong><\/td>\n 9.7 million m\u00b3f ub<\/strong><\/td>\n -1.1 million m\u00b3<\/strong><\/td>\n 8.6 million m\u00b3f ub<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n \n\n
\n \nTimber balance region 2<\/th>\n Stocks at 30 June 2026<\/th>\n Change vs Q1<\/th>\n<\/tr>\n<\/thead>\n \n Softwood sawlogs<\/strong><\/td>\n 1.38 million m\u00b3f ub<\/strong><\/td>\n +15%<\/strong><\/td>\n<\/tr>\n \n Pulpwood<\/strong><\/td>\n 1.40 million m\u00b3f ub<\/strong><\/td>\n +42%<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Source for inventory data: Swedish Forest Agency. m\u00b3f ub = solid cubic metres under bark. The agency revised survey coverage ahead of Q1 2026 to reduce double counting and include additional stocks, increasing covered volumes by an estimated 350,000 m\u00b3f ub.<\/em><\/h6>","protected":false},"excerpt":{"rendered":"