European Log Prices Reach Record Highs as Lumber Demand Remains Subpar

Europe’s softwood lumber market is facing growing pressure as record-high log prices collide with weak demand for finished wood products, Interior Daily reported (9-3-26). Buyers are maintaining low inventories and purchasing only as needed, leaving sawmills struggling to protect margins.

In Austria, spruce and fir prices are approaching their 2022 highs and have already surpassed the previous record in Salzburg. Demand for pine and larch also remains firm, with high-quality logs moving quickly despite a stagnant domestic economy. The strength of Austria’s roundwood market contrasts with weaker downstream lumber demand.

Pressure is also mounting in Finland and Sweden, where mills are reducing production, suspending operations, and considering permanent closures. Shipping disruptions through the Strait of Hormuz have added logistics, insurance, and storage costs for exports to the Middle East and North Africa, further reducing profitability.

For standard spruce and pine grades, the additional costs can eliminate profit margins, Interior Daily reported. Saudi Arabia has remained comparatively resilient because of access through the Red Sea, while the United Arab Emirates has been more affected by disruptions through the Strait of Hormuz. Egypt and Morocco have absorbed some redirected European volumes because of their access through the Mediterranean and Red Seas.

With European demand insufficient to absorb surplus production, manufacturers are increasingly redirecting volumes that can no longer be profitably shipped to Gulf markets. Those sales are often being made at lower prices and less favorable commercial terms, Interior Daily reported.