Finnish Forest Sector Economic Outlook 2015–2016 : Executive Summary
Toimittajat
Viitanen, Jari
Mutanen, Antti
Julkaisusarja
Natural resources and bioeconomy studies
Numero
63/2015
Sivut
9 s.
Luonnonvarakeskus (Luke)
2015
Julkaisun pysyvä osoite on
http://urn.fi/URN:ISBN:978-952-326-131-0
http://urn.fi/URN:ISBN:978-952-326-131-0
Tiivistelmä
During the last few years, the production and exports of the Finnish forest industry have grown, with the exception of printing paper. This year, the decline in demand for paper continues in the world market and the wood products industry in particular suffers from increasing competition and decreas-ing market prices. All these have been reflected in the exports and production of the Finnish forest industry. The forest industry is catching its breath this year, while the growth of production and ex-ports will be more pronounced next year together with the strengthening economic growth in Europe.
In the wood products industry, the year-on-year production volumes of both sawnwood and ply-wood will decrease this year. In the first half of 2015, the exports of Finnish sawnwood to our key export markets in Europe have decreased due to tougher competition and weaker demand. On the other hand, exports to Asian markets have increased thanks to Chinese demand. Exports of sawn-wood to North Africa have also performed well. However, much uncertainty is related to the devel-opment in the next months. In China, the economic growth is slowing and the political uncertainties continue in North Africa and Middle-East. In 2015, it is estimated that the volume of exports of sawnwood from Finland will remain close to the level of last year, but the unit prices of exports will decrease. In the domestic market, the consumption of sawnwood is decreasing this year due to de-cline in residential construction. With respect to plywood exports, the unit prices of hardwood ply-wood have risen, but export volumes have been declining in the first half of the year. In 2016, produc-tion and exports of sawnwood and plywood are expected to improve as the economy in the euro zone continues to pick up and construction projects increase in number. The unit prices of exports are likely to rise a bit from this year’s level improving slightly the profitability of the wood products industry production.
In the pulp and paper market, the trends seen in recent years are likely to continue. Global con-sumption of packaging materials and pulp continues to increase, while demand for printing paper is falling. Increased production capacity makes it possible to start growing the production of pulp and cardboard in Finland, which will impact next year’s production and exports. Over the last few years, the reaction to falling market prices in Finland and elsewhere has been to wind up production capaci-ty, which has led to a levelling off of the prices this year. On the other hand, the production and ex-port volumes of paper from Finland will continue to decrease both this year and next. The pulp and paper industry will remain profitable, as confirmed investments will increase the production volumes of pulp and cardboard while the export prices of them both are expected to rise slightly next year.
Changes in forest industry production volumes are being reflected in the Finnish wood market. Year-on-year commercial fellings will decrease slightly, while wood imports continue to fall. In Fin-land, the fellings of spruce logs have declined as the exports of spruce sawnwood fell in the first half of 2015. Stumpage prices of softwood logs are forecast to decline this year due to a softer market outlook for sawnwood and fallen export prices. As the pulp industry switches to chemical pulp instead of mechanical pulp, demand for spruce pulpwood is likely to decrease, leading to falling stumpage prices this year. Stumpage prices of pine and birch pulpwood will also fall somewhat. In 2016, the growth of the forest industry production increases domestic commercial fellings to 57.1 million cubic metres. Increased pulp production improves the demand for pulpwood, and the stumpage prices of pine and birch pulpwood will rise somewhat compared to the average prices in 2015. On the other hand, the year-on-year stumpage price of spruce pulpwood will decrease. Due to increased plywood production and sawing, stumpage prices of logs will increase slightly. In non-industrial private forest-ry, gross stumpage income in 2015 and 2016 and operating profit per hectare for the same period will remain at around EUR 1.6 billion and EUR 100, respectively.
Low prices of fossil fuels and emissions allowances, as well as uncertainty related to subsidies, are holding back investment decisions and continuously curbing growth in forest energy. The con-sumption of forest chips is expected to fall to a level of around 8 million cubic meters (solid volumes) this year, with no growth forecast for 2016. The average purchase price of forest chips at plants in 2015 and 2016 is expected to remain at almost the same level as in 2014. Production of wood pellets in Finland will grow by a few per cent. Investments that will be completed in 2016 will further increase wood pellet production.
Employment in both the forest industry and forestry will improve somewhat in 2015 and 2016, but the employment trends vary according to sector. In the building joinery industry, the decrease in do-mestic new construction will lead to a fall in the number of workers, while the number of forestry en-trepreneurs and their family members grows more quickly than the number of employees decreases.
In the wood products industry, the year-on-year production volumes of both sawnwood and ply-wood will decrease this year. In the first half of 2015, the exports of Finnish sawnwood to our key export markets in Europe have decreased due to tougher competition and weaker demand. On the other hand, exports to Asian markets have increased thanks to Chinese demand. Exports of sawn-wood to North Africa have also performed well. However, much uncertainty is related to the devel-opment in the next months. In China, the economic growth is slowing and the political uncertainties continue in North Africa and Middle-East. In 2015, it is estimated that the volume of exports of sawnwood from Finland will remain close to the level of last year, but the unit prices of exports will decrease. In the domestic market, the consumption of sawnwood is decreasing this year due to de-cline in residential construction. With respect to plywood exports, the unit prices of hardwood ply-wood have risen, but export volumes have been declining in the first half of the year. In 2016, produc-tion and exports of sawnwood and plywood are expected to improve as the economy in the euro zone continues to pick up and construction projects increase in number. The unit prices of exports are likely to rise a bit from this year’s level improving slightly the profitability of the wood products industry production.
In the pulp and paper market, the trends seen in recent years are likely to continue. Global con-sumption of packaging materials and pulp continues to increase, while demand for printing paper is falling. Increased production capacity makes it possible to start growing the production of pulp and cardboard in Finland, which will impact next year’s production and exports. Over the last few years, the reaction to falling market prices in Finland and elsewhere has been to wind up production capaci-ty, which has led to a levelling off of the prices this year. On the other hand, the production and ex-port volumes of paper from Finland will continue to decrease both this year and next. The pulp and paper industry will remain profitable, as confirmed investments will increase the production volumes of pulp and cardboard while the export prices of them both are expected to rise slightly next year.
Changes in forest industry production volumes are being reflected in the Finnish wood market. Year-on-year commercial fellings will decrease slightly, while wood imports continue to fall. In Fin-land, the fellings of spruce logs have declined as the exports of spruce sawnwood fell in the first half of 2015. Stumpage prices of softwood logs are forecast to decline this year due to a softer market outlook for sawnwood and fallen export prices. As the pulp industry switches to chemical pulp instead of mechanical pulp, demand for spruce pulpwood is likely to decrease, leading to falling stumpage prices this year. Stumpage prices of pine and birch pulpwood will also fall somewhat. In 2016, the growth of the forest industry production increases domestic commercial fellings to 57.1 million cubic metres. Increased pulp production improves the demand for pulpwood, and the stumpage prices of pine and birch pulpwood will rise somewhat compared to the average prices in 2015. On the other hand, the year-on-year stumpage price of spruce pulpwood will decrease. Due to increased plywood production and sawing, stumpage prices of logs will increase slightly. In non-industrial private forest-ry, gross stumpage income in 2015 and 2016 and operating profit per hectare for the same period will remain at around EUR 1.6 billion and EUR 100, respectively.
Low prices of fossil fuels and emissions allowances, as well as uncertainty related to subsidies, are holding back investment decisions and continuously curbing growth in forest energy. The con-sumption of forest chips is expected to fall to a level of around 8 million cubic meters (solid volumes) this year, with no growth forecast for 2016. The average purchase price of forest chips at plants in 2015 and 2016 is expected to remain at almost the same level as in 2014. Production of wood pellets in Finland will grow by a few per cent. Investments that will be completed in 2016 will further increase wood pellet production.
Employment in both the forest industry and forestry will improve somewhat in 2015 and 2016, but the employment trends vary according to sector. In the building joinery industry, the decrease in do-mestic new construction will lead to a fall in the number of workers, while the number of forestry en-trepreneurs and their family members grows more quickly than the number of employees decreases.
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