Södra Reduces Q4 Production at Two Swedish Sawmills

On Thursday, Sweden’s Södra announced that it will temporarily reduce production at its sawmills in Värö and Mönsterås, Sweden, during Q4. The company cited an unusual market situation in which sawn timber prices have fallen too low relative to raw material and production costs.

Södra said the Swedish sawmill industry is under pressure, with timber prices at record highs and construction markets weakening both domestically and abroad. In the US, housing construction has fallen to levels not seen since the pandemic, while European demand has also declined.

Low demand has pushed inventory volumes above planned year-end levels across several production units. At the same time, a stronger Swedish krona has further reduced profitability, as local prices have remained unchanged since spring.

The company has already implemented temporary production stops this year and will now extend those measures through Q4, cutting output by about 20% to manage inventories and address the imbalance between manufacturing costs and sales prices.

Commenting on the adjustment, Södra’s Head of Sales and Marketing Jonas Karlson said:

“It’s a balancing act in an unusual situation, but we see that a temporary adjustment in production is necessary to manage the situation in the finished goods market and to ensure our long-term competitiveness. We have a responsibility toward our members, customers, and employees to act with a long-term perspective. By reducing production, we create the conditions to better align with demand, manage inventory levels, and strengthen the market’s long-term stability.”