War in Timber market predicted by Danske Bank

February 27, 2010 by timbercommunity

Danske Bank predicts in its Q1 newsletter for 2010 (1 March) a war in timber market.  In this first phase the forest owners are the winners since there will be price increases.

Independent sawmills increased prices to new peak levels. It started when the forest product company Holmen declared its new timber range "Braviken Gran" would be a price leading product. The company Södra countered directly and they are planning a timber price increases  of 75 kr. The price increase is  an adoptation to the market but when the organisation make a record dividend of as much as 50% of profits to its members (393 million SEK), the conclusion of Danske Bank is that the southern timber war has started.  

Southern sawmills in Sweden can look forward to a tumultuous period over the next years. It looks like South Sweden will get a deficit of enormous 6 million m3fub after all  investing is done, and now when Rörvik looks set to survive.  This timber war there will be both alliances and loosers. 

Johan Roos, Director of Marketing, LRF Konsult Forest Office comments: Timber market is showing strength in recession Timber market is surprisingly strong, at least for Swedish sawmills. Its sawmill managers see generally positive about the future. The range is lower than normal due to the snow storm, but the ales is new sales is high. It will lead to a high range later this spring. 

Depending on an equally unexpected dramatic recovery in the second half of 2009, Danske Bank claim that timber exports from Sweden was higher in 2009 than 2008, (+ 2% nov 08-nov 09). During the same period, exports fell in Finland with 14%.