Paper production down, paperboard up
The production of paper in Finland will be reduced by 3–4 per cent this year and 3–5 per cent next year. This is explained by announced or already realized capacity closures and weak demand in Europe. However, the export price will top last year’s price. In spite of declining production, paper products still account for about 40 percent of Finnish forest industry’s export earnings. Paperboard production in Finland is forecast to increase significantly this year and next year owing to new production capacity and a fairly good demand situation. Growth is particularly strong next year as the new capacity will be in full use. The average price for paperboard is expected to remain rather stable.
Pulp export price lifted by exchange rate
Finnish exports of softwood pulp will rise this year and next. Increased exports are supported by capacity expansions. Weakening of the euro against the US dollar will raise the average export price of Finnish pulp by more than eight per cent compared to last year. However, next year the price will drop as global pulp production capacity increases. The market for softwood pulp is remains fairly balanced.
Uncertainty in sawn softwood markets
The year has been challenging for the Finnish sawmilling industry and no relief is expected in the short term. Sawn timber production will fall by 3–4 per cent in 2015. Uncertainty is weakening the outlook for exports. Domestic demand has been declining due to weak construction activity. The strengthening of the euro against the currencies of main competitors, Sweden and Russia, has weakened the competitiveness
of Finnish exports. Due to oversupply in most markets, export volume will rise only slightly and the average export price will fall this year.
The need for wood products at domestic and export markets will increase moderately in 2016. Finnish plywood production is expected to rise rather strongly because of new production capacity. Finnish sawn softwood production will rise by 2–3 per cent. Continued weak market balance will enable only a marginal markup in next year’s average export price.
Further information
Paper, paperboard and pulp: Forest Economist Matleena Kniivilä, +358 40 164 8078, firstname.lastname@ptt.fi
Sawnwood: Forest Economist Jyri Hietala, +358 40 164 8151, firstname.lastname@ptt.fi