The strong supplies of sawn products that characterised the first half of 2004 continued during the third quarter, reports Setra. Furthermore, the company says that demand in Scandinavia as a whole for wood products was stable during the first nine months of 2004. It was slightly stronger in Sweden and slightly weaker in Norway compared with the same period last year.
The UK and Japanese export markets saw stable demand. In Germany, a somewhat weaker trend was noted towards the end of the period. In all export markets the stronger Swedish krona exchange rate led to lower selling prices in kronor compared with the same period last year.
Södra reports that consumption of sawn timber has benefited from high levels of building activity in the US, Japan and Europe. However, it says that supply has also been at a high level, which has prevented prices from being raised in line with costs. Demand for spruce saw logs and pulpwood continues to be high, while the market for pine saw logs has cooled somewhat.
Sales flashpoint
A potential flashpoint in sales of Swedish timber to the UK has arisen as a result of the UK government’s sustainable purchasing policy. As the Swedish national certification programme belongs to the global PEFC “umbrella” scheme, the UK Central Point of Expertise on Timber (CPET) has deemed it is proof of legal, but not sustainable timber. It decided that the FSC and the Canadian CSA systems do meet the sustainability criteria. To counter this the European and Nordic Forest Owners Associations, as well as European sawmills, are working intensively both in Brussels and the UK. “This policy is a clear violation of both the EU‘s competition regulations and British law,” said Sven Lundell, forestry director for the Swedish Forest Owners Associations and president of PEFC Sweden. He fears serious consequences if it becomes more difficult for Swedish timber to enter the British market. “If the proposal goes through, it will give our main competitor Canada an unreasonable advantage. This could lead to disruptions in trade,” said Mr Lundell.
The Nordic forestry sector has also been warned by the director-general of the Swedish Environmental Agency, Lars-Eric Liljeland, that it will have to switch to new tree species as a result of an increasingly warm climate.
“Signs of this warmer climate are already being felt, with trees rejuvenating increasingly further up the mountain slopes and young plants of deciduous trees, which are currently associated with the south of Sweden, are being found far up in the north,” he said. As a rough calculation, he added, this century the climate zones in Scandinavia will move north at between 5-9km per year. Mr Liljeland said that these changes in the climate zones will occur so quickly in the coming century that there will be severe consequences for the ecosystem and the composition of different species.
A study by Skogforsk, the Forestry Research Institute of Sweden, shows that with better rejuvenation, more processing, more clearing, more lodgepole pines, better elk hunting and more forest fertilisation the value of each annual felling in Sweden could be increased by SKr7bn to SKr8bn. “With better development and care of the forests we can increase the annual felling volume in Sweden by more than 15 million m3,” said Ola Rosvall of Skogforsk. “This will be enough to supply three new large pulp industries plus around 10 new sawmills.”
Mill investments
Changes continue in the Swedish sawmill industry with investments in new equipment and also the closure of sawmills. For example, Södra Wood Products is to invest SKr65m in a new saw line at its Unnefors sawmill, doubling annual production to 90,000m3, and SKr45m in a new planing mill at the sawmill at Värö, which will be integrated with the trimming mill. The new mills will be operational in the autumn. By undertaking its own planing, the Värö sawmill will be able to meet increasing demand for planed wood goods, principally from the UK and Ireland.
The Vida Group is investing SKr50-60m in its Hestra and Borgstena sawmills but is closing a sawmill with a capacity of 40,000m3 at Ljungby Timber, although the drying and planing mills will continue to be used. “Despite the closing down at Ljungby we shall be able to saw an additional 75,000m3 in the coming year,” said president Santhe Dahl. Sawmills at Dorotea, Ålsta and Boden have also been closed by various owners.
