The market situation for sawn timber was relatively positive before the COVID-19 pandemic. The market had grown at a steady pace for many years. In 2019, all key markets grew by a few per cent. The construction industry was on the upswing, and the use of wood was becoming more common.
“Before the pandemic, we were expecting market growth to slow slightly globally and in almost every market area,” says Antti Koskinen, Senior Consultant at AFRY.
Early in 2020, the COVID-19 pandemic brought the sawn timber market to a halt at the same rate as the virus spread.
Sawn timber market turns positive
Koskinen estimates that the sawn timber market will turn from negative to positive during 2021.
“We will see minor growth in 2021, and the growth rate will accelerate in 2022. In terms of volumes, it may be possible for the sawn timber market to reach the 2019 level in 2024. However, forecasting is difficult. Even the COVID-19 forecasts keep changing,” says Koskinen.
“We have predicted that the impact of the COVID-19 will not be as dramatic in Asia as it is in North America and Europe. Asia is likely to resume growth earlier, with 2021 being a year of clearly noticeable growth.”
Also, research and rating company Moody's predicts that the sawn timber market will grow in 2021. According to a forecast released in January, the outlook for the global forest products industry is positive. Demand will increase in 2021 due to the global GDP growth and increasing construction and renovating activity. Wood product prices will remain mostly flat as demand and supply even out.
A boost for wood from green growth in the EU?
The increasing popularity of wood-based construction has been discussed for a long time. Climate change is accelerating the shift from talk to actual changes. Sampsa Auvinen, President of the European Organisation of the Sawmill Industry (EOS), also sees signs of this in the EU’s green growth and recovery programmes.
Auvinen points out that wood is the only renewable and carbon-neutral raw material in the construction industry. Cross laminated timber (CLT) capacity has increased, and wood-based construction is trendy.
“In construction, it is essential to consider emissions over the entire life cycle, from the production of building materials to the usage phase of the building and beyond. Increasing the use of sawn timber products is a significant opportunity to reduce emissions,” says Auvinen.
CLT is a growing segment
Koskinen points out that CLT still plays a minor role in the sawn timber market in terms of size, but its role is more significant in terms of product value.
“This is undoubtedly a growing market, particularly in Central Europe. CLT has a somewhat established position, especially in countries where wood-based construction is popular in the first place. There has also been some hype in North America, where investments have been made and are being planned,” says Koskinen.
Sustainability originally emerged as a theme in the sawn timber market through certification of the wood's origin. In other words, because of climate change, attention has also been drawn to the role of wood raw material, as well as the energy efficiency of production.
“The emphasis is on sustainability, especially in Europe. The certification and origin of wood must be appropriately managed,” says Koskinen.