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Sweden to cut production in sawmills due to high energy prices and falling market
Posted on October 10, 2022 |
- The recent increase of SEK 1/kWh in electricity prices is unsustainable for Sweden’s largest sawmill group, Vida, as the company will need to increase the cost by 10%, which is SEK 170 million on an annual basis.
- In the short term, price hedging and production cuts will mitigate the cost shock but Vida will reduce production by 15%.
- Electricity prices in both SE3 and SE4, central and southern Sweden, increased before the invasion of Ukraine which worsened during the war even more.
- The higher costs for electricity are putting pressure on the sawmills and also on manufacturers of other building materials as the cost of producing steel and concrete is also increasing.