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Sweden faces timber price surge as high interest rates squeeze sawmill operations

Posted on October 21, 2024 |

High interest rates and global instability continue to challenge the Swedish and global timber markets, leading to higher prices, less sawmill production, and larger stockpiles of timber.

Timber and pulpwood prices are at their highest since the mid-1990s, while forestry products are near the bottom of the economic cycle, with only steel performing worse.

Timber production in Sweden is down 3% from last year, and Finland’s sawmills have reduced capacity by 6%. Further cuts may follow if the economic situation remains tough.

In the USA, the largest timber market, sawn timber prices hit a record low in July, leading to sharp production cuts. Interest rates in the US are even higher than in Europe.

China is facing a construction crisis, with many unsold properties, adding more pressure to the timber market.

Sweden’s timber stockpiles grew during spring and summer, despite being peak sales season, signaling a difficult period for the industry.

High raw material costs, which make up 70–80% of sawmill expenses, are also a major concern.

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