The sawn timber market is expected to decrease by around 30 million cubic metres in 2020
MARKET LOOKING FOR NEW GROWTH
SAWN TIMBER
TIMBER
MILLION m 3
BN EUR
400
80
–8,8%
ASIA NORTH AMERICA EUROPE
350
70
314
–11,2%
286
58
300
60
52
100
250
50
18
95
16
200
40
Demand for sawn timber has already increased in China. Wood-based construction, which stores carbon, offers new growth opportunities across the globe.
103
14
150
30
93
15
100
20
HEIDI HAMMARSTEN
25
111
21
50
10
99
0
0
The market situation for sawn timber was relatively posi- tive before the COVID-19 pandemic. The market had grown at a steady pace for many years. In 2019, all key markets grew by a few per cent. The construction industry was on the upswing, and the use of wood was becoming more common. “Before the pandemic, we were expecting market growth to slow slightly globally and in almost every market area,” says Antti Koskinen , Senior Consultant at AFRY. Early in 2020, the COVID-19 pandemic brought the sawn timber market to a halt at the same rate as the virus spread. The rapid decrease in demand was driven primarily by the slowdown in the construction industry, which is the most significant user of sawn timber. “The construction sector reacted strongly to the down- turn in the economy, even more so than the GDP. When the economy struggles, construction struggles even more.” Sampsa Auvinen , President of the European Organisa- tion of the Sawmill Industry (EOS), says there is a differ- ence between Spain, Italy, Great Britain and France, which have been hit the hardest, and the other European coun- tries, where the construction industry has fared better. “Even countries in the latter group may have to face challenging times in the future. It is also likely that the less-affected countries turn inward and target their pro- duction more at the domestic market,” Auvinen says. However, the cloud has a silver lining, albeit thin: “While the amount of industrial construction decreased, the num- ber of renovation and household construction projects increased. There was even a shortage of sawn timber in some places during the summer,” says Auvinen.
BACK TO GROWTH IN 2021? We are still far away from sustainable growth.
2019
2020e
2019
2020e
“We will see minor growth in 2021, and the growth rate will accelerate in 2022. In terms of volumes, it may be possible for the market to reach the 2019 level in 2024. However, forecasting is difficult. Even the COVID-19 fore- casts keep changing,” says Koskinen. “We have predicted that the impact of the COVID-19 will not be as dramatic in Asia as it is in North America and Europe. Asia is likely to resume growth earlier, with 2021 being a year of clearly noticeable growth.” The first signs of emerging growth appeared in August and September 2020. The Chinese economy began to recover. Furniture man- ufacturers and the wood products industry increased their production, which was also reflected in the increased im- ports of sawn timber. According to Global Wood Info, China increased its imports of softwood sawn timber by 42 per cent in the second quarter of 2020 compared with the previous year. The import volume was 7.1 million cubic metres. According to customs statistics, exports of Finnish and Swedish sawn timber to China increased by 8.4 per cent during the first half of 2020, and exports to other Asian countries increased by 5.6 per cent. Exports to Germany increased by 6.0 per cent, while total exports of Finnish and Swedish sawn timber to Europe decreased by 6.0 per cent. Sawn timber prices continued to increase in the United States, and European producers increased their transat- lantic exports.
Changes in softwood sawn timber demand by region
SOFTWOOD SAWN TIMBER, ALL GRADES
MILLION m 3
150
130
110
OCEANIA RUSSIA LATIN AMERICA MIDDLE EAST AND NORTH AFRICA
ASIA EUROPE NORTH AMERICA
90
60
30
0 2019
2020
2021
2022
2023
2024
2025
2026
2027
Antti Koskinen Senior Consultant at AFRY. AFRY is an international consulting company created when the Swedish ÅF acquired the Finnish Pöyry in February 2019.
22
23
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