Prices of logs in expected to drop this year and in 2020

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Luke/Fordaq
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Due to the downward trend and lower production volumes in Finland's wood products industry, the average stumpage prices of logs will decrease by 3–7% this year.

According to the Natural Resources Institute Finland (Luke), the production of pulp and paperboard remaining at a high level will maintain the stumpage prices of pulpwood in an increase of 0–2%. Industrial roundwood removals will decrease by 5% to slightly above 65 million cubic metres. Imports of roundwood will remain at the 2018 level.

“Next year, industrial roundwood removals will decrease by another 3%. If the decrease in the production of sawnwood continues, stumpage prices will decrease by 2–3% from this year,” says Jussi Leppänen, scientist at Luke.

Lower demand for paper and stopped growth in pulp and paperboard production will reduce the stumpage prices of pulpwood by 1–2%. Roundwood imports are expected to increase slightly from this year.

According to Luke, this year, gross stumpage earnings from non-industrial private forestry will decrease to EUR 2 billion, and the total amount is expected to continue its slight decrease next year. The operating profit of non-industrial private forests is expected to decrease below EUR 140 per hectare in 2019. In 2020, the operating profit will decrease below EUR 130 per hectare.

Use of forest chips will increase slightly

The prices of emissions rights have nearly tripled during the past year. This supports the competitiveness of forest chips, bark and sawdust in heat production.

The use of forest chips is expected to increase by roughly 2% this year and next year. The average production price of forest chips will increase slightly. The domestic consumption and production of wood pellets is expected to increase at an annual rate of a few per cent.

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