The Finnish forest industry’s production and export volumes, except for paper, will increase over last year’s. Demand is highest for sawnwood, pulp and cardboard. According to Finnish Forest Sector Economic Outlook, released by Natural Resources Institute Finland, the competition will lead to falls in export prices in all main product groups except plywood this year, but prices will stabilise next year.
Exports of sawnwood are expected to grow this year to 8.5 million m3, a record-high figure. Sawnwood export volumes to Europe, Asia and North Africa increased during the first half of this year, particularly spruce sawnwood exports to China.
Intensifying competition and the oversupply of sawnwood in certain markets are burdening the export prices of sawn pinewood in particular.
“The slight rise in sawnwood production and export volumes is expected to continue in 2017, but the decline in export unit prices will stabilise,” predicts Antti Mutanen, Researcher at the Natural Resources Institute Finland (Luke).
We cannot look forward to growth in the consumption of sawnwood in Finland this year, due to the sluggish trend in the construction of single-family houses. More emphatic growth is expected in domestic consumption in 2017. Plywood production and export volumes and prices are being maintained by the recovery in construction in Europe, alongside lively demand for industrial applications.
Growth in the production and exports of cardboard
Due to new investments and healthy demand in the global market, the production and export volumes of pulp and cardboard will increase this year and next. The growing global supply of hardwood pulp is also reflected in world market prices of softwood pulp. In Finland, softwood pulp prices fell considerably early in 2016.
Demand for cardboard is livelier, but its supply in key market areas has increased. Cardboard export prices will fall this year, but level off next year. The decline in the consumption of printing paper around the world continues. The production and export volumes of paper from Finland continue to decrease. Healthy demand for pulp and cardboard will maintain the pulp and paper industry’s profitability this year and next at close to last year’s high level.
Lively timber market with moderate price trends
As the use of timber in the forest industry grows, commercial fellings will rise in Finland this year to 59.5 million m3 and to 61.8 million m3 next year. Roundwood imports will rise slightly this year.
The stumpage prices of spruce sawlogs will rise only slightly this year, as demand for spruce sawnwood is good but export prices are rising only moderately. The increasing use of spruce pulpwood in cardboard manufacturing will raise stump prices slightly. The stumpage prices of other timber assortments will fall this year. Next year, the increase in softwood pulp production will increase demand for pine pulpwood and raise its stump price.
In non-industrial private forestry, gross stumpage earnings will rise this year to around EUR 1.7 billion, and to slightly more next year. The operating profit per hectare of private forests will be EUR 110 in 2016 and EUR 115 in 2017.
The use of forest chips stagnated
The low prices of fossil fuels and emissions allowances alongside uncertainties about subsidy policy are holding back investment decisions and curbing growth in forest energy use.
The consumption of forest chips is expected to grow to around 8.2 million m3 (solid volumes) this year, with equal figures forecast for next year. Correspondingly, the average purchase price of forest chips at plants in 2016 and 2017 is expected to remain at almost the same level as in 2015. This year, the production of wood pellets in Finland will remain equal to last year’s level, but will increase by a few percent next year.