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Russia-Ukraine incident hits international trade, Finnish timber volume drops by 30%

2022-08-30

According to the Finnish Natural Resources Institute (Luke), between January and July 2022, the volume of timber trade in Finland fell by 30% compared to a year ago. Compared to the previous five years, pulpwood trade was down 12% and pulpwood trade was down 18%. Currently, the prices of logs and pulpwood are still on the rise.


Russia is a major supplier of natural gas. After the Russia-Ukraine incident, Europe stopped its import and export trade with Russia, resulting in tight energy supply and demand in Europe and rising prices this year. Increased demand for energy wood in Europe has also led to higher production costs in Finnish forestry. The data shows that Finnish roundwood prices continued to rise in July 2022, approaching their peak levels a year ago, with the average price of Finnish spruce and pine logs rising by 1% in a month.


As the world's second largest exporter of paper and cardboard, Finland still needs to rely on imported wood. It is reported that last year Finland imported about 9 million cubic meters of wood and wood chips from Russia for the pulpwood industry, accounting for about three-quarters of imports. Under the influence of the Russia-Ukraine incident this year, Finland had to relieve the immediate pressure by increasing the local logging volume and importing wood from other countries. The wholesale market was affected by the increase in demand for pulp wood, which raised the price of wood. The data shows that the real price level of pulpwood this year is 3% higher than the average price of the previous year.


It is expected that in the next few years, under the influence of the increasing demand for production capacity in Finland, local logging and timber imports will continue to increase.


In recent years, the demand for Finnish wood in the Chinese furniture market has grown, especially in the field of children's furniture. It is understood that it is mainly because young parents begin to pay more attention to the materials of children's products, and Finnish sawn timber is considered to be a suitable raw material for making children's furniture because of its safe and durable quality. Therefore, the price increase of Finnish wood may have a certain impact on the import of domestic children's furniture market.


However, for the Chinese pulp market, the current pulp output is still unable to meet consumer demand, and the demand for imported pulp is relatively high, but as the world's largest pulp importer, the global pulp export is in short supply. The impact of the domestic market is not yet obvious.


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