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Finland pulpwood prices rise to unpredictable levels
[Oct 22, 2024]


 
Finland pulpwood prices rise to unpredictable levels

According to the Natural Resources Institute Finland (Luke), the annual average of conifer stumpage prices will rise by 6-8% this year. Birch stumpage prices will rise by 14% and fibrewood by 18-22%.

In 2025, logging volumes are projected to increase by a further 3% and 5% respectively. Total industrial wood harvesting will increase by 4% to 64 million cubic metres.

Average stumpage prices for coniferous flowers will rise by 2-3%. Birch stumpage prices will rise by 4% as the shortage of birch raw material for plywood production continues. Stumpage prices for pulpwood will rise by 5-6%.

Gross stumpage revenue is expected to reach a new record high of €2.9 billion.

There are several reasons for the price increase. The start-up of a newStoran Enso board machine will boost demand. The recent ramp-up of Metsä Group's Kemi pulp mill will also create additional demand for wood. In addition, the sawmill industry is slowly starting to recover. The energy industry is now also competing for wood.

However, there is one thing that is important for the price of wood that is rarely said out loud. Finland stopped importing timber from Russia because of the war.

As a result of the war, imports of timber from Russia stopped in July 2022. Almost as if by magic, the price of pulpwood started to rise sharply at almost the same time. Before that, the graph showing the price of pulpwood resembled a dead man's brain curve.

When supply becomes scarce, the price goes up. For forestry companies, imported timber from Russia was partly a way to contain the price of domestic timber. Before the end of imports, around ten million cubic metres of timber were shipped from Russia to Finland. At its peak, the import volume was around 16 million cubic metres. This is a considerable amount. Luke estimates that the volume of industrial timber felled this year will be 61.7 million cubic metres.

Imported timber from Russia played a major role, especially in the forest industry in South-East Finland. So when imports stopped, the closure of the Sunila pulp mill was not a big surprise.

What about the future? Domestic wood prices are already hurting forestry companies. But supply and demand are looking for a balance. If wood availability remains weak and prices remain high, capacity will be closed in the coming years.

Source: uusisuomi.fi

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