The growth of the global economy, increasing demand for forest industry products and investments in Finland’s forest sector continue to boost pulp, sawn timber and paperboard exports. The logging of industrial timber is breaking records, and demand for Finnish wood is increasing stumpage prices, according to the Forest Sector Economic Bulletin of the Natural Resources Institute Finland (Luke).
The materialisation of possible trade sanctions, the results of the Brexit negotiations and any possible spill-over of Italy’s debt problems and political crisis introduce an element of uncertainty to the continuance of the good market demand.
The production and export of sawn timber continue to grow
Exports of sawn timber to China took a temporary dive early in the year, but are expected to bounce back during the second half of the year after the Chinese have unloaded their warehouses. Exports to Japan and North Africa are also on the rise. In Finland, demand for sawn timber is likewise increasing slightly, in step with an increase in the construction of detached houses.
The production of sawn timber in Finland is expected to increase from the 11.7 million cubic metres last year to 12.2 million cubic metres this year. Thanks to solid market demand, the average price of sawn timber exports is also expected to increase to a slight degree. The export prices of sawn pine timber are increasing faster than the export prices of sawn spruce timber. Plywood production and exports are also growing, but the average price of exports will remain on last year’s level.
Chinese demand increases the export of pulp and prices
The rise in the global market price of pulp has continued this year due to the demand for tissue paper and paperboard in China and other Asian countries. Finland’s pulp and paperboard production and exports are growing as a result of the demand in export markets and the increased capacity of pulp mills. Average export prices are also rising.
Demand in the printing and writing paper markets has been robust, and prices have risen particularly due to the increase in the price of pulp. The earlier closures of paper machines are also contributing to the situation. Even so, there is no change in sight with regard to the long-term trend in the demand for paper. Rather, consumption in Finland’s main market, Europe, continues to decline. Paper production and exports in Finland will lag behind last year’s figures, but the average export price is expected to increase slightly.
Logging of industrial wood reaches a new record, stumpage prices are on the rise
The growth in the production of sawn timber, pulp and paperboard will increase the wood use of the forest sector this year, and the logging of industrial wood will increase from the slightly more than 62 million cubic metres last year to more than 64 million cubic metres.
The increase in the demand for Finnish wood will increase the stumpage prices of pulpwood and logs by 3–6 per cent. Wood imports are expected to grow to approximately nine million cubic metres from last year’s 8.2 million cubic metres. The use of forest chips and their average plant prices are expected to increase slightly this year.
Key forecast variables in the forestry sector 2016–2018f
Average stump prices in privately-owned forests 2016–2018f
The 2019 outlook for the forest sector will be assessed in the Finnish Forest Sector Economic Outlook to be published in October.
Finnish Forest Sector Economic Bulletin 2018 (Metsäsektorin suhdannetiedote 2018) (in Finnish)
- Economic development
- Wood products industries
- Pulp and paper industry
- Roundwood market
- Bioenergy market