On June 16, the European Sawmill Association EOS met in Skellefteå in northern Sweden for its summer general assembly. In the coming months, the sawyers expect markets to become more difficult with a high degree of uncertainty. The EU legislation surrounding the Green Deal is also causing uncertainty.

The reason for the meeting was the 70th anniversary of the CEI-Bois association of the European wood industry. On this occasion, the EOS members were presented with the EOS Annual Report 2020/21 . One item on the program was a visit to the Sara Kulturhus, one of the tallest wooden buildings in the world.

Sawmills expect tough third quarter

When analyzing the softwood market, EOS President Herbert Jöbstl said that the first months of 2022 had been very positive for the industry thanks to strong demand. The supply of raw materials is stable, albeit at very high prices. The by-products markets have also developed well. However, there are signs of a slowdown and the next few months will be very difficult amid high unpredictability, softening construction markets and rising inflation. Due to this uncertainty, no one can make any predictions for the fourth quarter, but it is very certain that the third quarter will be tough.

With regard to the hardwood market, EOS Vice President Maria Kiefer-Polz added that 2021 and the first months of 2022 had been positive for the industry despite high roundwood prices.

The next few months are likely to become more problematic due to a general market slowdown and further increases in commodity prices.

Beech shortages across Europe apparently not an issue

In the Black Sea, logistics are a problem due to the Russian war against Ukraine. The oak sector continues to be hampered by unsustainable log exports and oak log prices in particular have skyrocketed.

Astonishingly, Kiefer-Polz said not a word about the drastic undersupply of beech to the sawmill industry in Germany. This does not seem to be an issue across Europe.

Both the softwood and hardwood sectors continue to be hampered by high costs, particularly for energy prices. Regarding the development related to bioenergy, there is a general consensus that solid biomass is an important source of domestic green fuels in many countries, for which there is no alternative in the short term.

EU legislation creates uncertainty

In the last two years, attention to forests and their use has increased in different areas of European and international politics, especially with regard to achieving climate neutrality and sustainable development. With the European Green Deal, the EU commits to eliminate – or offset – its greenhouse gas emissions by 2050 and to give European forests and timber use a central role in the fight against climate change and biodiversity loss.

While it is very likely that the impact of some pieces of EU forestry legislation will have a negative impact on the supply of raw materials, other recent European initiatives related to the forest and timber sector are expected to have a positive impact on recognition and further improvement the use of wood as a sustainable raw material.

Without wood products, there is no decarbonization

The conclusion of the EOS members is that the demand for wood products is solid and wood is gaining increasing recognition among consumers, but the challenges on the supply side are manifold. Securing the supply of raw materials is of crucial importance for the entire wood-processing industry.

The EOS members were convinced that without the production of sustainable wood products there is no way to decarbonise the European economy.

The next EOS General Assembly will take place on October 14th in Copenhagen, on the occasion of the International Softwood Conference (ISC 2022) from October 12th to 13th.

The post European sawmills expect tough months ahead appeared first on Global Wood Markets Info.

Sign Up for Our Newsletters

Get notified of our top breaking news

You May Also Like

The European sawmill industry is skeptical about the third quarter of 2022

The first months of 2022 were very positive for the industry thanks…

Belgium: Worries about availability of wood; prices on the rise

Wood traders in Belgium are currently experiencing an unusually high demand for…

The European sawmill industry is skeptical about Q3/2022

The first months of 2022 were very positive for the industry thanks…

SCA reports sharp fall in its wood division on lower prices and higher costs

SCA’s wood division saw a 30% fall in EBITDA in 2022 compared…