Bustling wood trade

Since September, wood trade has been very active in Finland. We are continuing to increase our procurement for the Rauma sawmill that is now online and in preparation for the bioproduct mill under construction in Kemi. Meanwhile, we have substantially reduced procurement from the Baltics.
  • Wood market review
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EVP, Metsä Forest

The market for end products remains strong despite the risks related to the global economy increasing during the autumn. The market situation is weak for sawn timber. Our wood resources are good, and we have managed to handle our mills’ wood supply practically problem-free with our owner-members. Thanks to all of you for this.

The positive momentum has continued in the wood market, and since early August, the weekly purchases from private forests by members of the Finnish Forest Industries Federation have consistently exceeded the weekly purchases of the previous three years. The prices of pulpwood have increased by approximately 20 per cent, and those of logs by around 10 per cent. Many owner-members have taken advantage of the early delivery premium for wood from delivery sales and of the double bonus campaign for new delivery sales, which will run until the end of January 2023. Your forest specialist can provide further information about the campaign.

We are currently interested in purchasing thinning sites available for summer harvesting and wood from delivery sales received in the winter and spring. Of course, we are also happy to purchase regeneration felling sites. The purchase outlook for winter felling sites is better than usual, as last winter’s harvesting conditions were excellent, and this year’s winter weather looks promising as this review is being written. Indeed, this winter promises to become our most active ever in terms of volume, and the employment outlook for entrepreneurs is strong.

We recommend that forest owners order soil preparation and seedlings when concluding wood trade to ensure that a vital new forest can be established as quickly as possible on the felled site. It pays to be fast with next spring’s orders to ensure the availability of the desired seedling types.

Wood trade in the Baltic Sea region is quite well balanced, with the exception of the Baltic markets, which are in turmoil due to the European energy crisis. We have replaced wood imported from Russia with Finnish and Swedish wood. We have also reduced our purchases from the Baltics because of the region’s high wood prices. Historically, the Baltic markets have fluctuated greatly, and in the long term, average roadside prices have been weaker there than in Finland.

We are a forerunner in the digitalisation of wood supply and were recognised in the Finnish Quality Award competition for our innovation, which uses neural networks to estimate growing stock data. I am extremely satisfied that we have such top-class competence in digitalisation.

One of the cornerstones of our strategy is making full use of data in all our business operations. We have concluded an agreement on the near real-time visualisation of damage caused by the spruce bark beetle and storms. It is based on various remote surveys and made available to our owner-members through Metsäverkko. I believe this will provide significant added value to forest owners and to us in the future.

The new wood terminals in Lapland, catering to the Kemi bioproduct mill, will be completed by the end of the year. They will enable wood to be measured with weighbridges on reception, without the need for batches to be separated and measured at the mill, as was previously the case. The new wood terminals, VR’s rail connection and the automated overhead travelling cranes at the Kemi mill constitute a world-class logistics concept.

We will need hundreds of drivers for harvesting and transports, especially in northern Finland. We want to support the work of our entrepreneurs with the Pro Kuljettaja project, which has got off to a flying start.

Initiatives with significant impacts on forestry are underway in the EU related to the forest strategy, biodiversity strategy and the Fit for 55 package. In Finland, preparations are being made for the national forest strategy, biodiversity strategy and action plan, as well as the reform of the Nature Conservation Act.

In our changing world, we must secure the prerequisites for forestry to safeguard future profit from forest assets. It is smart to jointly adopt measures that preserve the high appreciation of our field. Our recyclable products made from a renewable raw material store carbon, provide solutions to global problems and replace fossil products.

Let’s work together to take care of the world’s best managed forests so we can leave them to the next generations in an even more vital and diverse condition. Thank you to our owner-members for excellent cooperation and an excellent year. Wishing all of you a peaceful Christmas!

EVP, Metsä Forest
Juha Jumppanen, EVP, Metsä Forest, is responsible for Metsä Group’s wood procurement and forestry services. He has worked his entire career at Metsä Group. He started in the forestry service business, and since then he has gained experience in harvesting, industrial customer relations, member services and wood trade. Continuous improvement and the development of customer experience and employee satisfaction are particularly close to his heart.