Record high timber trade volume and soaring log prices in Finland in May

May 2023 witnessed an unprecedented surge in the volume of timber trade in Finland, reaching the highest level ever recorded for that month. Throughout the early part of the year, an astounding 26% more timber was purchased compared to the average of the previous five years. The remarkable growth in trade was accompanied by a significant increase in timber prices across all assortments.

Average prices for pulpwood soared to a historic high, with standing sales reaching approximately Euro 27-30 per m3 and delivery sales reaching Euro 46-47 per m3. This surge in prices reflects a substantial increase in demand and limited supply in the Finnish timber market, reports Luke, the Finnish Natural Resources Institute.

In standing timber sales, spruce logs commanded an average price of Euro 78.8 per m3, while pine logs fetched Euro 75.1 per m3 in May. These prices exhibited a real increase of 2% compared to April and a 5-7% increase compared to the same period last year.

Regarding pulpwood, the average standing timber sale price experienced a notable rise of 6-8% from the previous month and a staggering 30-38% increase from the previous year. Birch saw the most significant price surge, with spruce reaching Euro 29.9, birch at Euro 28.3, and pine at Euro 27.4 per m3. Standing timber sale prices for pulpwood hit a record high, and the real price of pine pulpwood reached its highest level in the monthly statistics since they began in 1995. The last time the average price surpassed this level was in 2008 for spruce and 1995 for birch.

In delivery sales, pulpwood prices also witnessed a notable increase of 3-6% from April. Average prices in delivery sales exceeded those of the previous year by 20-23%. This surge in prices has not been observed since 2008, highlighting the current exceptional market conditions.

The trade volume of industrial roundwood purchased from private forests in Finland in May reached an astounding 6.8 million m3, setting a new record for the month. This figure represented a remarkable 53% increase compared to the average volume recorded over the past five years.

From January to May, timber trade in Finland experienced an impressive 66% growth compared to the same period last year, surpassing the average of the previous five years by 26%. Log trade witnessed a significant rise of 33% compared to the previous five years, while pulpwood trade increased by 20% during the same period.

The surge in timber trade volume and the unprecedented rise in prices indicate a robust demand for timber products in Finland, potentially driven by various factors such as construction projects, furniture manufacturing, and the booming housing market. However, the limited supply of timber resources has led to increased competition and subsequently pushed prices to record highs.

Finnish pulpmills and sawmills have long been dependent on imported wood raw-material to meet their wood fiber needs. In 2021, as much as 23% of the pulp sector relied on foreign logs and wood chips, predominantly from neighboring countries. From 2018 to 2021, the total import volume was over 11 million m3 annually, with hardwood logs accounting for about 50% of the volume. However, the stable foreign fiber supply changed swiftly in early 2022. Finland’s wood raw-material imports from Russia fell dramatically in 2022 following many years of active trade between the two countries.