situation of global sawmill

Finland: Lowest profits in 15 years

Article by Philipp Matzku (adapted for; translated by Eva Guzely) | 09.01.2020 - 08:56

For more than a year, log prices have been falling in Finland and Sweden due to a weak demand by regional sawmills. Decreasing raw material prices did not keep pace with the falling sawn timber prices and thus led to lower profits in both countries.

Since Wood Resource Quarterly’s records began in 2005, the Finnish sawmill industry had its lowest profits in the third quarter of 2019. Due to lower sawn timber prices, gross profits of sawn timber producers fell faster in Finland in the past two years than in Sweden.

At the same time, Finnish sawn timber exports rose to 7.6 million m³ in the first ten months of 2019 (+5% compared to 2018). In Sweden, they amounted to 10.6 million m³ (+2%).

The financial situation of sawn timber producers who are being followed by WRQ was rather weak in fall 2019. However, according to WRQ, there are signs that on most markets sawn timber prices have reached the minimum possible level at the end of last year. On the west coast of the US and Canada, the third quarter saw gross profits recover compared to the previous quarter. Nevertheless, they remain lower than the five-year-average of both regions.

As to the Austrian sawmill industry, profits have gone up thanks to the lower cost of raw material in the last years. In Eastern Russia, the sawmill industry saw its situation improve in the third quarter, after a marked decrease in the second half of 2018.