Great demand for wood

The market for end products has picked up, and wood is in great demand, despite the Kemi bioproduct mill's long maintenance shutdown. We have had a strong first part of the year in terms of wood trade, and are happy to note the increasing popularity of the Metsä Group Plus forest management model, which improves forests' biodiversity and resilience against climate change.
  • Wood market review
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EVP, Metsä Forest

We are most interested in purchasing felling sites available for summer harvesting, birch logs and roundwood out of delivery sales. The Metsä Group Plus model is becoming increasingly popular, and during the February–April campaign, it accounted for 40 per cent of wood trades and 50 per cent of cubic metres of solid wood.

Contract customers can still take advantage of the price guarantee period, which ends in May.

The stem volume-based pricing that we developed as a frontrunner in wood trade is expanding to regeneration felling sites. We no longer use a fixed stem price, as stem volume-based pricing has received excellent feedback, and it is found to be a fair wood trade method.

The Baltic wood market is relatively balanced. The roadside prices of overbark pulpwood are currently at the same level as in Finland, while the prices of energy wood are lower. In Sweden, the market situation for softwood pulpwood is balanced, and roadside prices correspond to the level in Finland.

We will sell our wood supply business in Estonia to Combi Forest OÜ, a subsidiary of Combiwood Grupp OÜ. We have also agreed long-term deliveries of pulpwood and chips with them. With this solution, we are seeking flexibility for various market situations. Our main focus is on owner-member services and wood trade in Finland.

The weather conditions were excellent for harvesting last winter, except for the extraordinarily cold period in early January, and we successfully raised our stock levels. The employment prospects for our harvesting and transport contractors are reasonable, despite the five-month shutdown of the Kemi bioproduct mill due to a gas explosion. We have reorganised our wood flows, and will transfer wood from the north to the south as well as raise our stock levels across Finland.

In Finland, we will reduce the use of fossil-based chemicals in harvesting by replacing them with Phlebiopsis gigantea in stump treatment, and with biodegradable oils in the lubrication of harvesters' saw chains. We estimate that discontinuing the use of urea will reduce the carbon dioxide emissions from our harvesting operations by an amount equivalent to the annual emissions of roughly one thousand diesel cars, and more than half a million litres of fossil saw chain oil will be saved in the forest. I consider this a significant nature preservation act.

The positive trend continued in customer experience – in wood trade, service sales and harvesting. In February–March, we organised seminars celebrating the 90th anniversary of Metsäliitto Cooperative, which were attended by some 5,000 owner-members and their guests.

The implementation of the EU forest policy involves plenty of work. Preparations for the national definitions of old-growth and primary forests are in the home stretch. It is important that the definitions are clear so we have a level playing field. The state must allocate adequate funding for sites that meet the private forest criteria to avoid any risk of grey protection. The EU nature restoration regulation did not move forward, and it may be taken up again in the spring.

This is an excellent time to review the conditions in your forest and ensure good growth with young stand management and thinning. Thank you to our owner-members for an active first part of the year. We wish you a verdant spring!

EVP, Metsä Forest
Juha Jumppanen, EVP, Metsä Forest, is responsible for Metsä Group’s wood procurement and forestry services. He has worked his entire career at Metsä Group. He started in the forestry service business, and since then he has gained experience in harvesting, industrial customer relations, member services and wood trade. Continuous improvement and the development of customer experience and employee satisfaction are particularly close to his heart.