Trump’s massive impact on the timber market
© Timber-Online.net
The question above was one that was asked repeatedly in 2025. The largest timber market – the USA – as well as the world’s largest producer of softwood lumber – Canada – were faced with turbulence the extent of which has previously been unimaginable.
The World Uncertainty Index climbed to a historic high. This is bad news especially for the timber industry, since it is highly dependent on the construction industry. The greater the uncertainty in the economy, the less construction activity there is.
Europe needs global markets
One in three cubic meters of lumber produced in Europe is sold overseas. For Germany, the USA is the number one overseas market. According to US statistics, 1.6 million m³ of German softwood lumber were sold there in the first three quarters. And this despite:
- Germany recording a 14% decrease in exports – even though deliveries to the US increased by 4%;
- and there being too little damaged wood available for profitable production of US-sized lumber.
US full of surprises – anything is possible
The USA will likely be full of surprises in 2026 as well. Towards the end of this year, the market is still characterized by weak demand and high inventory levels, and prices have recently fallen sharply. Demand is unlikely to pick up anytime soon, but the inventory situation might: The Canadian timber industry has curtailed cutting capacity in response to tariffs exceeding 40%. Therefore, there could be periods with lucrative windows of opportunity for European suppliers next year.
China is the second-largest market. However, with over 50 million vacant housing units, the country has a significantly lower demand for softwood lumber. And if demand should suddenly recover, China will be mainly supplied by Russia.
In Japan, on the other hand, housing construction starts remain very weak, and no major change is expected in 2026 either.
2026: MENA and Europe
This leaves two promising markets for the European timber industry:
- the MENA region
- and Central Europe.
MENA products saw the strongest upward trend in the past two years, with the price rising by 50% since Q4 2023 | Source: 1) Holzkurier monthly price trend; 2) weekly US prices (East Coast) acc. to Holzkurier survey; 3) Association/timber trade companies/Holzkurier market survey | © Holzkurier 2025
MENA prices up by 100%
The strong performance of the North African and Gulf states is evident not only in the volumes that have been shipped there (e.g., Finnish redwood exports to Egypt were up by 50% in H1), but also in the price trend. At nearly €300/m³, the price level is almost 100% higher than that of the past decade. Within three years, an increase of 33% was recorded, and since the fourth quarter of 2023, prices have even gone up by 50 percentage points.
In terms of volumes, sales are expected to show a positive development in 2026 as well. However, Central European timber trade companies are concerned about their competitiveness due to the relatively high prices for softwood lumber in Central Europe.
2025 Winners: Germany and Italy
The two main markets, Germany and Italy, performed very well in 2025. The German Sawmill and Timber Industry Association (DeSH) estimates that domestic German demand grew by around 3% this year to 16.9 million m³ of softwood lumber. At the same time, production decreased by 5% due to the supply situation. This gap was mainly filled by Austria and Finland this year. Austria exported 770,000 m³ (+30%) to Germany in three quarters, while Finland sold 380,000 m³ (+11%) there.
Scandinavians “sell at discount prices”
Since both Finland and Sweden suffered losses in trade volumes on some of their markets, both producing countries increasingly focused on strong markets such as Germany and Italy. In both countries, the main suppliers, i.e. Germany and Austria, complained that Scandinavians were selling their products at prices that were €20 to €30/m³ below the respective market price. Glulam lamellas, solid structural timber in smaller sizes, rough-sawn lumber, and even packaging materials were recently sold off at discount prices.
It is unclear whether the export managers are selling Scandinavian products so cheaply due to a lack of market knowledge or because they want to gain market shares.
Prices to be raised by €0 to €50/m³ in January
At the turn of the year, Scandinavian companies announced price increases ranging from €0 to €50/m³. German and Austrian timber industry companies are aiming for an increase of €20/m³ in the first quarter of 2026.
Canada needs new markets
2026 will also see a reorientation of Canadian softwood lumber exports. For decades, Canada specialized almost exclusively in dimensions, qualities, and grades that were in demand on the US market. Given the new US administration, this comes with considerable risks. Next year, we will definitely see more Canadian products in Great Britain, the MENA region, and Japan. However, it will not be easy to achieve short-term success in markets with metric dimensions.
The fact that the world’s largest lumber producer has to find new markets “overnight” reflects the enormous changes in the sales market.
Too little log wood when damaged wood is scarce
Even more fundamental changes are taking place in Europe, as climate change is having a major impact on the availability of the preferred type of wood, i.e. spruce, in many areas.
In 2025, considerably smaller volumes of damaged wood accumulated in Germany, the Czech Republic, and Austria. Nevertheless, supply was insufficient in all three countries.
In 2026, spruce is still expected to be scarce and expensive. The wet weather in 2025 improved the forest protection situation in many places – in some regions, there is simply no spruce left.
The price level of the main grade B, 2b has reached levels that are unprecedented in recent decades. It remains to be seen to what extent this development will stimulate harvesting activity. Across region, spruce supply and reduced cutting should reach a better balance until mid-May.
Pine continues to gain importance
With the price of spruce logs, that of pine wood is also approaching or even exceeding the €100/m³-mark in December. In terms of area (WEHAM 2025: 2.4 million ha), pine is the most important tree species in Germany ahead of spruce (2.3 million ha).
The Holzkurier therefore expect the trend towards an increased use of pine by processing companies to continue in 2026. Furthermore, several Central European CLT producers are planning to increasingly use pine wood next year.
The growing importance of pine is, in fact, a global phenomenon: The largest capacity expansions are taking place in the southern United States, where new sawmills are focusing on southern yellow pine. In Scandinavia, redwood (= pine) is also gaining importance compared to whitewood (= spruce).
