CCE 2019


Roundwood Demand Continues to Increase

Thanks to the positive economic situation and investments, roundwood use by the forest industry will break the 70 million cubic metre barrier for the first time since the recession. The use of imported roundwood will continue to decrease slightly this year and next. The increasing use of wood has been hinted at the past few years by the increasing volume of domestic roundwood trade and removals, and its rate of growth is expected to slacken during the forecast period. The growing demand will be reflected in rising roundwood prices. The price of roundwood will also be pushed up next year by inflation.

Roundwood use increase will be based on Finnish supply
The strong growth of the global economy is reflected in roundwood demand, which will continue robustly in both the mechanical and chemical forest industries. Thanks to realised investments, the Äänekoski bioproduct plant will be operating at full capacity in 2019, thus attaining a new level in the use of roundwood. With use of imported roundwood declining, removals in Finland will continue to increase slightly, although at a lower rate than in previous years.

Trade in pinewood stands marked for cutting
The upward turn of standing sales from private forests began in early 2016. The growth will continue this year and next but will slacken slightly. Roundwood trade was affected in early 2018 by winter harvesting conditions, with trade in private stands marked for summer cutting removed earlier than planned. The increasing export of pine sawn goods, particularly to North Africa and China, will increase the demand for pinewood. Demand for spruce log stands continues strong, but there is hardly any room for growth. The volume of trade in thinning stands will increase from that in the past few years. The overall growth in roundwood trade will level out at 2–4 percent this year, and the same figures will apply in 2019.

Prices pushed up by demand and inflation
The divergence in the weighted average stumpage price for spruce logs that began in early 2016 increased last year. The increasing demand for pine will be reflected in prices this year, reducing the difference slightly. The annual weighted average price of pine logs will rise 4–6 percent from last year’s average price. The price of spruce and birch logs will rise less steeply, 2–4 percent. Increasing demand will push up the average price of pine pulpwood by 3–4 percent this year. The price of roundwood will be affected next year by growing inflation, which will raise nominal prices, with real growth remaining a couple percent. Gross stumpage earnings from private forests will increase thanks to slight increases in the volume of removals and a hike in price. Income from private forests will rise to 2.1 billion euros next year.

More in the next issue of ipw. Source: Pellervo Economic Research PTT Forest Sector Forecast –Forestry, Spring 2017

rkj / 04/12/2018

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