The volume of lumber production in Finland continues to decrease significantly. In 2021, production was 11.9 million cubic meters, in 2022 it decreased to 11.2 million cubic meters, and in 2023 it was 10.4 million cubic meters.
In June, the accumulated production volume for 12 months reached 10.1 million cubic meters of lumber. The last time such a low level of production was observed was in October 2013. The use of wood is down by more than four million cubic meters compared to the record level of 2021.
“The price of wood is the most significant cost item for sawdust companies. The price of wood has increased significantly more than the price of the final product, i.e. lumber. The ratio of prices for wood and lumber has become the highest in more than 15 years, and the situation on the market is very difficult," says Tino Aalton, CEO of the Finnish Sawdust Industry Association, in a press release.
Until 2021, imports from Russia almost 10 million cubic meters of wood, mainly birch chips and firewood for the pulp industry. The wood market has also been affected by the rapid decline in the use of peat for energy purposes, which has led to an increase in the demand for wood for energy purposes. Much of the wood is also diverted to the pulp industry instead of being processed into durable wood products. For the past 15 years, 40 to 50 percent of the total volume of wood harvest has been cut down from Finland's forests annually.
"Guaranteeing the supply of wood is the most important issue for sawmill enterprises. If Finland's wood supply deteriorates and costs rise faster than competitors, it opens up opportunities for companies from other countries to take market share. Important decisions regarding timber supply are the national biodiversity strategy and the development of recovery plans," says Aalton.
No positive signals are currently being observed. Most of the products of the sawdust industry are exported to more than 70 countries. Major exporting countries include Japan, China, Great Britain and Egypt. According to the sawdust industry, the current situation on the export market is difficult and no significant positive signals are coming from any region of the world.
Finland is the largest market for sawdust enterprises. According to data for May, 1.8 million cubic meters of products were sold on the domestic market in 12 months. 20 years ago, this indicator exceeded 5 million cubic meters.
Most of the lumber is used in construction. Aalton believes that the decrease in the consumption of lumber indicates a weak situation in the construction industry, as well as the fact that woodworking has not become widespread in Finland, despite public demand.
"The dust industry offers solutions to combat climate change. Wood products are excellent technical carbon stores. It is important to ensure not only the supply of wood, but also to prevent the growth of logistics costs so that exports remain competitive and the national economy receives income," Aalton notes.
Despite the difficult situation, the sawdust industry hopes that global demand for wood products to grow in the long term. In recent years, companies in the industry have made dozens of investments in production.
