Production curtailment reflects market reality
Our announcement in August that we would reduce sawn timber production for the remainder of 2022 reflected weaker expected demand, particularly in Europe.
The market was already slowing in Q2, and this negative trend has continued. Södra Wood produces more than 2 million m³ of wood products annually at its eight sawmills, and production is being adjusted mill-by-mill depending on the demand assessed for each product and market segment.
The current outlook is for demand to remain at a lower level than normal for some time ahead, although the long-term outlook for wood products remains highly favourable thanks to confidence in timber as a sustainable construction material, and a global shortage of housing.
As surprised as we were about the speed of the change in the last six months, global uncertainly means the market direction could easily turn up again. If the situation were to deteriorate in Russia with logistics or if China takes a different approach to Russia, then suddenly we will find ourselves in a totally new situation again. In Södra we try to plan for different scenarios, both better and worse, to make sure we can service you as a customer as well as possible in all cases.