The tipping point
With destocking, production curtailment and steady demand, the market is rapidly heading for a balanced situation
The market correction remains active following such strong activity in the summer. While stocks are balancing gradually, we expect de-stocking by merchants and sawmill production curtailment to continue until early 2022. According to the Swedish Forest Industries Federation, inventory among Swedish producers is now at a historically quite normal level and way off its peak.
The underlying global market for timber remains strong. The 10-year pattern of increased new-home building shows no sign of altering its steady course, with timber accounting for an ever-growing market share. Industrial users are also busy, and the US market’s resurgence continues, at the same time as supply from Canada is decreasing.
It all points to a market which could change course quite abruptly. Merchants expect demand levels in 2022 to settle at pre-pandemic levels and maintaining stocks to meet this demand will require careful planning, particularly with the logistics challenges being faced globally.
Our advice to customers is to assess demand over the coming months as accurately as possible and plan together with us. We, in turn, will do our best to ensure the timber required arrives where and when it is needed.