Oliver Combe brings us the latest market news.

2020 has seen unprecedented disruption to global trade due to the COVID-19 outbreak and its impact on regional economies, although the timber trade has proved particularly resilient and is now showing signs of recovery and the further development of a new world order.


After two years of sawlog price decline, the global sawlog price index remained unchanged in Q4 2019 and Q1 2020 which may indicate that we have reached the bottom of the market cycle. This is supported by modest increases in pulp prices during Q1 2020 and increases in softwood lumber imports to the USA in Q1 2020. While softwood imports to China plunged 14 per cent in Q1 2020 and are
39 per cent down on the all-time high of Q2 2019, there are signs of a strong recovery in Q2 2020.

In terms of supply of timber to the market, the impact has not been as severe as expected and has only checked the development of the new world order in the global lumber trade.

The European Organisation of the Sawmill Industry believes: “The effects of the coronavirus on softwood sawmills have so far been less serious than feared. Many sawmills have benefited from brisk business activity resulting from the DIY stores kept open in many countries.

“At least for a time, substantial volumes of sawn wood have also been called for release by pallet and packaging producers in some places. Sawn softwood exports to places such as Asia and North America have also remained above the expectations at the outset of the crisis. After the cutbacks in output in March and April, many European softwood sawmills correspondingly increased their output again in May and then resumed normal operation. At the beginning of June, the opinion at the general meeting was that the reduction in the volume of sawn wood output in 2020 as a whole would be able to be limited to 10 per cent.”

Further afield, there have been some major casualties as a result of COVID-19, with mill closures in North America and, in particular, the evacuation of the Austrian management team and subsequent sudden stopping of the two Klausner North America mills in Florida and North Carolina in late March, followed by the filing for bankruptcy protection in April with reported debts of over $100 million. Latest reports are that these two sawmills will be auctioned in the next two months and are likely to be up and running again in late 2020 under new ownership.

The COVID-19 outbreak hit the industry at the tail end of a period of severe restructuring. 2019 saw a period of growth in global demand suddenly slowing down and significant rationalisation taking place in production capacity to bring supply back into line with demand. This had been achieved by a combination of permanent mill closures, temporary layoffs and reduced working hours. The impact of this rationalisation had been particularly severe in North America and Scandinavia.

This trend had continued into early 2020 and has seen some significant repositioning amongst sawmill companies including Bergs Timber selling its Swedish sawmilling operations so it could concentrate on secondary processing and its Baltic operations.

The three active sawmills at Orrefors, Vimmerby and Morlunda together with the closed mill at Gransjo were all sold to the Vida Group, a subsidiary of the Canadian lumber giant Canfor.

In North America and Canada, the major lumber producers have been struggling with increased raw material costs, environmental disruption and changing raw material supply. Canfor recorded losses of $294 million for 2019 against profits of $608 million in 2018 and has embarked on a strategy to diversify its production capacity away from Canada by buying Vida in Sweden and Elliot lumber in the USA.

Halfway through 2020 we appear to be nearing the end of the process of rationalising production capacity and are now seeing plans for new investment in processing plants.

Security of raw material supply is an increasing concern for major processors together with the need to improve efficiency and reduce costs. The glut of beetle-damaged timber in Canada is coming to an end while environmental and social concerns are restricting supply and increasing costs elsewhere in America and Canada.

The overall result has been a decline in North America’s importance as a global supplier of timber, while Europe has become an increasingly important player and Scandinavia quietly consolidates its position as a major force.

Two major trends are emerging;

1. Efficiency improvement investments in Scandinavia to ensure mills are versatile and efficient enough to compete in the global market.

Koskinen has announced a €35–40 million investments in a new 365,000 m³ sawmill at Jarvela in Finland which will consolidate operations onto a single site and allow further expansion up to 500,000 m³ per annum.

Metsa is planning to build a new 750,000 m³ per annum sawmill at Rauma – an investment of €200 million to create the most modern sawmill in the world. The investment is based on a forecast increase in demand for high quality sawn softwood for the components and woodworking industries in Europe and Asia.

2. Raw material utilisation investments in Central Europe to make use of the glut of beetle-damaged timber forecast to come to market over the next 10 years. The scale of the volumes coming to market is staggering – recent estimates are 250 million m³ so far and another 500 million m³ in the next five years.

Many companies are planning on the glut of beetle damaged timber being around for enough time to back major investments. There are reportedly a dozen companies that have planned for, started or are completing new capacity installations to process beetle damaged timber by the end of 2021. This will amount to at least two million m³ per annum of extra capacity with other schemes being planned which could take the additional capacity to 5.4 million m³ per annum.

There has been significant development in capacity to harvest damaged timber and experience shows that winter-harvested timber is almost as good as freshly cut green sawlogs, although summer harvesting is problematic due to blue stain and cracking especially in period of warm, wet weather like summer 2020.

Sawlog prices in Central Europe are now some of the lowest in the world and are similar to the southern US. The sawlog prices are now close to the cost of harvesting and haulage so there is little scope for them to fall any further. However, at current levels the Central European mills have a significant competitive advantage in both the domestic and export markets.

Many of the large European mills are equipped with planers and kilns and are so able to focus their extra production capacity on export markets that require kiln-dried planed timber, in particular the USA, China, Australia and the UK. The USA and China look particularly good fits and export volumes to these markets have increased significantly in 2020.

Globally, demand appears to be increasing and this month there has been price recovery in the key markets of the USA and China. The key question is whether the price increases are due to short-term constraints on supply or part of a longer-term trend of global demand increasing faster than production capacity and how will they impact on the UK market.

Forestry Journal:


Timber demand in the UK has held up very well during the lockdown and after the initial two-week shutdowns for some mills, many have returned to work, adapted to the social distancing and responded to a surprising level of orders for unseasoned material from the landscaping and fencing sectors. While the impact on the carcassing market has been more pronounced and longer lasting, this sector has noticeably improved in the latter part of June and early July. Most carcassing mills are now back to full production and are reporting strong incoming order levels, although there is considerable caution as to how long the upturn in demand will last and whether a sudden rush of imports from Central Europe will kill off the resurgence.

Pallet and packaging activity levels have held up reasonably well but this has been a mixed picture. While the medical and food sectors have had strong demand, the general manufacturing sectors have reduced their requirements.

The pallet, packaging, landscaping and fencing markets are now primarily serviced by UK and Irish mills; the increased demand translating directly into increased sawmill activity.

The supply here has been further constrained by lower than expected levels of sawn timber coming out of Ireland to the mainland. The ongoing problems with felling licences in the Irish Republic have significantly restricted log supplies and although the Irish mills have increased their purchasing efforts in the west of Scotland, this has not been able to compensate fully for the reduced supply.

In the board markets processors with added value capability have benefited from a COVID-related DIY boom.

MDF sales have been going very well, especially for added value material which is supplying the DIY market and refurbishment markets. Chipboard has been quieter due to the slowdown in new housebuilding but will hopefully improve as the construction market returns to normal.

While the sawmills struggled initially with social distancing and logistics, there has been steady development in production volumes and many are now running at or near full capacity.

Supply of imported timber into the UK market has been constrained during the lockdown both from Eire, Europe and the Baltics, leading to gaps appearing in importers’ stocks which merchants are now looking to fulfil from domestic carcassing mills.

It appears the Swedish and Central European producers are currently focusing their sales on the US and Chinese markets and have reduced their volumes to the UK as these other markets offer better returns.

So rather unexpectedly the UK domestic producers are seeing activity levels increase at a time when the summer slowdown would normally be taking effect.


Prices for sawlogs have stabilised in the first half of 2020 and have even shown very modest and cautious price increases towards the end of Q2. With most mills now back up to full processing capacity there are now some concerns over availability of sawlogs, especially spruce. It appears that COVID-19 has reduced the supply of logs as machines have moved into lower production jobs while there has been less timber offered to the market by the private sector during spring 2020.

At the same time, increased demand for second-hand harvesting machinery from Central Europe for clearing beetle-damaged timber has led to older machines being exported and not always replaced, so this has also reduced the overall harvesting capacity in the UK.

A modest upturn in demand has now put the supply chain under pressure and it may take several months for the supply of logs to increase in line with demand.         

In the past shortage of supply has lead to price increases although currently the processors are very wary about increasing roundwood prices while the spectre of massive supplies of cheap wood in Central Europe hangs over their heads. Most seem to be looking for increased domestic market share with stable log prices to try and restore their profitability after a difficult 2019 and torrid start to 2020.

Forestry Journal:


2020 seems to be repeating the pattern of 2019 where strong prices in the winter fell back throughout the summer as supplies increased, demand fell and markets reached saturation point. The key factor in 2020 will be what impact the low oil prices we are seeing currently have on biomass prices over the next six months.

From a high of £50–55 per tonne roadside during the winter, prices fell back to £35–45 per tonne at roadside depending on local availability as markets became swamped with wood. There are now signs that stocks are reducing in some areas and over the last four to six weeks there has been a stabilising of prices and in some areas increases.


After the steady decline in prices of the order of 25 per cent during 2019 prices have stabilised during early 2020. However, volumes offered to the market appear to have been reduced and currently there are signs of raw material availability tightening and prices starting to increase.

Good quality sawlog rich clear fell parcels are still fetching £40–45 per tonne standing and more mixed clear fell parcels £30–40 per tonne standing. There is still uncertainty over poorer quality mixed conifer clear fells and thinning with a high biomass content and owners are reluctant to accept prices of £20–25 per tonne standing for clear fell parcels and are prepared to not sell and wait for the market to improve.

It will be interesting to see if this leads to a shortage of small round wood in the final quarter of the year.


The oak market was gone right off the boil in 2020 as COVID-19 uncertainty has hit both supply and demand at a time when most buyers have good stock levels either in their yards or in the forest. As there has been more stock available in the Midlands and South West recently, the buyers here have pulled right back whereas over on the east coast where the supply has been tighter there is still demand but at a price level.

On a more positive note, there is little or no material coming in from Europe so hopefully once domestic demand picks up demand for sawlogs should follow fairly quickly.


Firewood supply has steadily increased on the back of diseased ash felling at the same time as biomass demand has fallen due to cheap fossil fuels. This has lead to a build-up of stock in some areas and falling prices.

In the south of England, low-grade firewood is now grouped together with hardwood chip wood and is around £40 per tonne at roadside although this price should increase in the winter when demand increases and supply reduces.

As you move north the prices have remained much stronger due to better demand and less supply and firewood prices remain around the £50–55 per tonne at roadside mark with ash demanding a slight premium.


The timber market has proved surprisingly resilient and it appears the market has bottomed out and is beginning a slow recovery, sawlog demand is strong and looks set to continue into autumn but there is now an oversupply of small round wood and energy wood which is unlikely to change until bio-fuel demand increases in the autumn.

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