Forest11.06.2012

Wood trade barometer: Good demand for all types of timber

The utilisation rates of our production facilities are relatively high, which is why our need to procure and harvest timber is on a good level.

"The end-product markets for birch plywood and veneer and sawn softwood are fairly bleak, making it difficult to provide any reliable forecasts for the autumn. In any case profits for wood processing are weak and cost pressure is severe.

Compared with average prices for the past few years, softwood log prices are fairly high and, especially when considering the present level of prices and demand, the situation in terms of long-term profitable sawmilling is untenable. The increases in the price of sawn timber in early 2012 were not enough to raise the prices to last summer’s level and at the same time the price development of all cost factors has been unfavourable.

The situation for birch plywood has long remained steady but the past year has been overcast in nearly all markets. The market situation for birch veneer has been extremely difficult since last autumn.

Despite the negative market situation, we have been able to retain the high production levels of our mills and have thus been very active in purchasing and harvesting all types of logs, as well as pulpwood and energy wood. I believe that the situation will remain the same over the next few months regardless of the challenging market conditions. It is, however, evident that the pricing of wood needs to reflect the cost pressures emanating from the end-product markets.

The European spruce bark beetle has continued to damage spruce stands, especially south of Salpausselkä. The “bug” has, in the worst cases, caused up to 10–20% of spruce trees in the forests to dry up. Losses will be substantial if a lot of roundwood dries up into energy wood. Older stands of spruce need to be inspected several times during the summer. You can read more about the damage caused by the European spruce bark beetle at www.koskitukki.fi or ask our procurement supervisors to come take a look at your forest.

Information concerning forest energy-related subsidies had not been released by the time this article was published (unfortunately this same sentence was also in last winter’s report!). It is certain, however, that it is not worthwhile putting off decisions for areas requiring management. Our procurement supervisors will gladly help you to take advantage of present and future subsidy packages. Let’s get our young forests up and growing!"

Jussi Joensuu
Chief Forester
Koskitukki