Estonian Sawmills Suffering From Deteriorating Demand and High Energy Prices

Estonian sawmills are facing difficult times, and if conditions don’t improve some sawmills may need to temporarily close by year’s end. Deteriorating demand is hitting timber producers at a time of skyrocketing energy prices.

Mills also find themselves in competition with energy firms that are in the process of making the change from natural gas to burning wood and wood-derived products. The hot and dry summer has only complicated the situation.

Martin Arula, chairperson of AS Toftan, a sawmill in Võru County, told “Aktuaalne kaamera” that “We are preparing for a worse-case scenario, which means that prices will fall further, and the availability of raw materials will not suddenly improve.”

“Instead, we think that a particularly bad time will probably come in December and around Christmas-time, when we may have to instigate a longer shutdown,” Arula continued. He then added that changes in the market for different types of logs, firewood, and pulpwood had been extraordinary, while energy prices were absurdly high.

Võru County timber firm AS Barrus’ purchasing manager Lauri Junkin said, “Firewood prices are very high, while this is especially true for hardwood. We have such a rare situation where the price of firewood is approaching that of logs; these differences are extremely small, and in some places, they have already crossed over. For forest owners, the situation is one of choice—take their cut trees to a sawmill, or sell logs themselves, as firewood.”

For forest owners, the situation is one of choice: take their cut trees to a sawmill or sell logs themselves as firewood.

FEA compiles the Wood Markets News from various 3rd party sources to provide readers with the latest news impacting forest product markets. Opinions or views expressed in these articles do not necessarily represent those of FEA.
Original Source:
Falling demand and high energy prices harming sawmills