Demand for wood products remains high, but supply is limited, as reported by Swedish Wood. Despite production and manufacturing records in March, Swedish sawmills currently have their lowest inventory levels in more than 20 years, which has put pressure on sawn timber prices.
“Demand is increasing, as are prices on world markets. The lumber industry is used to dealing with large price fluctuations, but the current situation is unusual. On the other hand, if we look at the evolution of timber prices over a longer period, growth has been quite modest. We may be heading towards a situation where the timber is reaching a fairer market value, ”says Christian Nielsen, market analyst for the Swedish timber trade organizations and the Swedish Federation of Forest Industries.
Swedish sawmills were able to maintain production during the pandemic. However, the growing demand for wood products globally has led to a decrease in stocks at Swedish sawmills, resulting in the lowest inventory levels in over 20 years. Production continues at full speed and March became the best production month on record for the Swedish sawmill industry.
The global shortage of wood products is mainly due to declining production in other parts of the world. Several manufacturers of wood products, which generally have high production, temporarily reduced their activity in 2020, causing a significant shortfall in the international market.
“The global shortage of wood products is an undeniable fact, but Swedish sawmills are still working as hard as possible to meet existing demand. Their strength has been demonstrated by largely maintaining deliveries during the critical months when the pandemic hit full force last year. I am convinced that our members are fully focused at this time on delivering wood products to their customers, ”says Mathias Fridholm, Director of Swedish Wood.