Finland’s wood market has begun to pick up in recent weeks. Purchase volumes and prices of wood have risen. Overall, however, wood purchases lag behind the high demand for domestic wood. Almost half of the year is almost gone and less than a third of the wood needs of private forests have just been purchased. There will be strong demand for wood towards the end of the year. The Finnish Natural Resources Center (Luke) predicts an increase in wood prices.
Imports collapsed and opened up demand for domestic wood
Even in the light of the latest import statistics, Finnish timber imports have collapsed due to the war in Ukraine. Luke predicts that this year’s imports of raw wood to Finland will decrease by more than 60 percent to 4.5 million cubic meters. In the first phase, imports of certified wood from Russia stopped, and due to the sanctions imposed by the EU, the rest of Russian wood imports will decrease.
Finnish imports of wood from Russia as a whole have been significant, at more than 9 million cubic meters, replacing domestic wood and keeping price levels artificially low. In the future, the price of wood will be determined by the conditions for the functioning of the domestic wood market.
The seller’s market will open up to forest owners, as the majority of Finnish wood and the additional need for the use of wood is available from the forests of private forest owners in Finland.
In the latest economic review of the forest sector, Luke forecasts an average increase of 3-8% in the average price of wood, although regional differences are emphasized. This would mean increases of about 3-5 € for softwood logs and an euro for pulpwood compared to last year’s average price. This seems a moderate forecast compared to the fact that inflation in Finland is currently declining by about 6 per cent and the final products of the forest industry have risen considerably more strongly during the spring.
The highest forecast for the increase in the price of wood is for the plant price of forest chips (23.4 € / MWh), which according to Luke can rise by as much as 20-30%. This would also mean increased competition in the energy use of pulpwood, which would further increase the pressure on the overall price of wood. The market economy seems to be driven by the energy wood market.
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