Sweden's sawmill industry is caught in an unusual squeeze between historically expensive raw material and a lumber market that still does not generate sufficient margins, according to Vida CEO Karl-Johan L\u00f6wenadler. Despite the pressure that has already forced the group to close two sawmills, L\u00f6wenadler says the solution is not to reduce harvesting: Swedish mills need more logs and high utilisation to remain competitive.<\/p>\n
The apparent contradiction is striking. Swedish timber prices have retreated from the records reached in 2025, but remain around twice their 2019 level for several assortments. At the same time, lumber prices have failed to keep pace with the increase in raw-material costs.<\/p>\n
For forest owners, the market therefore remains exceptionally favourable. For sawmills, the same prices have become one of the industry's biggest problems.<\/p>\n
Vida, Sweden's largest sawmill group, is experiencing both sides of that market directly. The company is closing its Urshult and Orrefors sawmills, reducing annual lumber capacity by a combined 265,000 m\u00b3. The closures were attributed to a structural imbalance between sawmill capacity and available timber in southern Sweden.<\/p>\n
L\u00f6wenadler describes current conditions as exceptional even by the standards of a highly cyclical industry.<\/p>\n
\n\u201cIn my 35 years in the industry, I have never experienced anything like this.\u201d<\/p>\n<\/blockquote>\n
The problem is not simply weak lumber consumption. Southern Swedish sawmills are simultaneously competing for a limited supply of logs, pushing raw-material costs to levels that are difficult to recover from lumber customers.<\/p>\n
This creates an unusual situation in which mills can reduce capacity while continuing to encourage forest owners to harvest.<\/p>\n
Vida wants more timber, not less<\/strong><\/p>\nVida is currently directing much of its communication towards forest owners, encouraging harvesting and the sale of timber. L\u00f6wenadler argues that despite the retreat from last year's peak, current timber prices remain extremely attractive from a historical perspective.<\/p>\n
For several assortments, prices are still approximately double their 2019 levels. The adjustment since 2025 should therefore be viewed as a normalisation from exceptional records rather than the beginning of a low-price timber cycle.<\/p>\n
\n\u201cNo one needs to be afraid of logging. Our sawmills have large capacity and the prices are at a very good level.\u201d<\/p>\n<\/blockquote>\n
That message is important in southern Sweden, where insufficient log availability has become a constraint on industrial production.<\/p>\n
A sawmill's economics depend heavily on throughput. High fixed costs mean that running a plant substantially below its designed output can quickly undermine profitability, particularly when raw-material margins are already narrow.<\/p>\n
L\u00f6wenadler puts the issue simply:<\/p>\n
\n\u201cIn order to show a profit and be competitive, a sawmill must operate at full capacity.\u201d<\/p>\n<\/blockquote>\n
The closure of Urshult and Orrefors can be seen in that context. By removing 265,000 m\u00b3\/year of capacity, Vida can concentrate available timber and production across a smaller mill network rather than operating more plants at insufficient utilisation.<\/p>\n
Following the closures, the group will retain 13 sawmills with combined annual lumber production of around 3 million m\u00b3.<\/p>\n
The timber price peak has passed, but prices remain historically high<\/strong><\/p>\nFor forest owners, L\u00f6wenadler sees little reason to interpret the recent easing in timber prices as a weak market.<\/p>\n
Prices reached records in 2025 and have subsequently become more stable. Yet the comparison with the previous peak can obscure how much the market has changed over a longer period.<\/p>\n
For several timber assortments, current prices remain roughly twice their 2019 levels. The difference between the forest owner's position and the sawmill's position is therefore unusually wide. Forest owners continue to receive historically strong prices for logs, while processors face difficulty passing those costs through to lumber buyers.<\/p>\n
Vida considers a gradual stabilisation preferable to another period of rapid raw-material inflation. Forest owners need sufficiently high prices to make harvesting attractive, but sawmills also need a margin between log costs and the value of lumber and by-products.<\/p>\n
Without that balance, record timber prices can ultimately become counterproductive for both sides by forcing mills to reduce production or close capacity.<\/p>\n
Strong timber demand does not mean a strong lumber market<\/strong><\/p>\nThe pressure is concentrated in the gap between high log costs and weak lumber prices. Log demand can remain intense even when lumber demand is disappointing because mills still need sufficient raw material to maintain utilisation. If too many sawmills compete for a constrained regional timber resource, log prices can remain elevated despite weak profitability in the processing industry.<\/p>\n
That is increasingly visible in southern Sweden. Vida has said that the region has more sawmill capacity than the available timber resource can sustainably support under current conditions. The closures of Urshult and Orrefors are intended to address part of that imbalance.<\/p>\n
At the same time, L\u00f6wenadler remains positive about the longer-term position of Swedish lumber. Vida exports to markets around the world, and Swedish softwood continues to benefit from established export channels, consistent quality and an efficient industrial base.<\/p>\n
There are also tentative signs of improvement on the demand side. Renovation activity is strengthening in some markets, while timber construction continues to expand in Europe.<\/p>\n
Neither development, however, immediately solves the industry's margin problem. A meaningful improvement requires stronger lumber demand and a raw-material market that allows mills to operate competitively.<\/p>\n
Sweden may be entering a new timber price regime<\/strong><\/p>\nOne of the more important implications of L\u00f6wenadler's comments is that the industry should perhaps not expect timber prices simply to return to their pre-2020 range. The 2025 peak may have passed, but prices remaining around twice 2019 levels for several assortments suggest that the reference point itself has shifted.<\/p>\n
The question is increasingly where a sustainable price level can settle. For forest owners, that level needs to remain sufficiently attractive to bring timber onto the market. For sawmills, it needs to leave enough margin to process that timber profitably and compete internationally.<\/p>\n
The tension between those requirements explains what otherwise looks contradictory: Vida is closing sawmills because timber is too expensive and scarce, while simultaneously telling forest owners that this is an excellent time to harvest.<\/p>\n
There is no contradiction from the company's perspective. Fewer mills competing for the available resource, more harvesting by forest owners and higher utilisation at the remaining plants are all parts of the same equation.<\/p>\n
For the Swedish sawmill sector, 2026 is therefore becoming less a question of how much installed capacity exists and more a question of how much of that capacity can be supplied with logs and operated profitably.<\/p>\n
And L\u00f6wenadler's assessment suggests that Vida sees utilisation as critical. The company may be reducing the number of mills it operates, but for those that remain, the objective is clear: secure enough timber to keep them running at full capacity.<\/p>\n
<\/p>","protected":false},"excerpt":{"rendered":"
Sweden’s sawmill industry is caught in an unusual squeeze between historically expensive raw material and a lumber market that still does not generate sufficient margins, according to Vida CEO Karl-Johan L\u00f6wenadler. 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