European trade of wood chips has gone up substantially as sawmills have ramped up production and generated more residual chips

STOCKHOLM, Dec. 31, 2020 /PRNewswire/ -- Softwood lumber production in Europe has increased steadily increased over the past five years. Consequently, additional volumes of sawmill by-products, including wood chips, shavings, and sawdust, have become available to other sectors in the forest industry. The added wood fiber supply has predominantly benefitted pulpmills, manufacturers of wood-based panels, and wood pellet producers. Residual chips is typically a preferred lower-cost fiber furnish as compared to costlier small-diameter logs.

Over the past five years, the annual volume of residuals generated from Europe's sawmills has increased to an estimated 17 million m3, resulting in increased chip trade on the continent, particularly in the northern region. Softwood chip trade around the Baltic Sea has gone up by over 80% from 2015 to 2020, with the major shipments being from Russia to Finland, from Norway to Sweden, and from the Baltic States to Denmark and Sweden.

WRI estimates that in 2020 almost 2.6 million m3 of wood chips will be imported by Finnish pulpmills, up from 1.4 million m3 five years earlier. This will make Finland, for the first time, the world's largest importer of softwood chips - surpassing even Japan. Practically all Finland's chip imports have been from Russia and the Baltic States, with the former accounting for the lion's share of the supply. In the first seven months of 2020, Finnish wood chip importation from Russia was 33% higher than during the same period in 2019. According to the Wood Resource Quarterly, the average price for imported Russian wood has been relatively stable and is only slightly higher than the price for domestic pulplogs.  

In contrast to recent developments in Finland, wood chip imports to Sweden declined in 2020, ending a six-year upward trend. In 2019, Swedish chip imports reached an all-time high of 1.9 million m3. However, during the first seven months of 2020, import volumes from the major supplying countries of Norway, Estonia, and Latvia fell by 33%, and the total import volume for the year is on the path to be the lowest level in five years. The reduced demand for imported wood chips has resulted from both an increase in domestic residual supply from the sawmill sector and the large volumes of beetle-killed timber in the Central and Southern parts of Sweden, which are flooding the fiber market.     

Are you interested in wood products market information from around the world? The Wood Resource Quarterly (WRQ) is a 70-page report established in 1988 and has subscribers in over 30 countries. The publication tracks prices for sawlog, pulpwood, lumber & pellets worldwide and reports on trade and wood market developments in most key regions globally. For more insights on the latest international forest product market trends, please go to www.WoodPrices.com

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Wood Resources International LLC

Hakan Ekstrom

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www.woodprices.com

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SOURCE Wood Resources International LLC