In 2022, the global timber market has entered a period of slowing demand, and timber prices in many regions have experienced sharp rises and falls. How to survive under challenging market and macroeconomic conditions has become a major problem faced by global timber merchants.
For Europe, Russia and Ukraine incident, Europe rejected the timber supply from Russia. Although Russia can resupply timber to China, Central Asia and the Middle East, due to transportation problems, it hinders the supply of Russian timber to non-European regions.
Johan Freij, a senior forestry expert at Danske Bank in Sweden, believes that because of this, the Chinese market is increasingly buying timber from Europe, although this is only temporary.
But in fact, Europe is in the period when the supply is beginning to shrink, and if the subsequent demand in the Chinese market continues to increase, this is likely to push up subsequent timber prices.
According to Danske Bank's latest quarterly analysis, Forest and Economy, Swedish timber prices are experiencing sharp falls in the first two quarters of last year.
After autumn, Swedish timber prices are starting to rise sharply. However, this is not due to an increase in demand, but rather to a decrease in the supply of Swedish timber.
Looking back at the timber market in Sweden last year, Johan Freij, a senior forestry expert at Danske Bank, said: "There are many signs that the timber market has bottomed out at that time, and we do not believe that timber prices will experience a typical economic reversal. Most of the world's Construction is also down, so demand is down."
Just as in the previous period of low prices in the Swedish timber market, Egypt and China rescued the Swedish timber market and gave sawmills the confidence to increase prices when stocks dwindled. The United States will increase imports to the Swedish timber market in 2022.
In 2022, when Swedish timber prices are free-falling, the United States will increase its imports of timber from Sweden and become Sweden's most important export market for timber products after the UK. This has reduced some losses in the Swedish timber market, at least for now, prices are rising cautiously.
The Swedish timber market is like a microcosm of the European timber market. The difficult 2022 has passed, but the unfavorable global timber market conditions still cause price fluctuations in the European timber market and temporary reduction of factory capacity, and further disrupt the timber supply chain.