European Forestry Pulse #121 🌲

Hello,

Ask a forest owner how much pulpwood they will sell next year. Most can tell you. Ask how many buyers will be left to sell it to. Most cannot.

That second number moved this month.

Here's what's moving European forestry this week:

Every forest owner tracks the price of pulpwood. Very few track the number of people who can pay it. Graphic paper is one of the largest pulpwood buyers in Europe. Magazine paper. Book paper. Office paper. Those mills consume enormous volumes of wood every year.

That part of the industry is consolidating. The deal itself and the Statement of Objections was covered in issue #118.

One thing has moved since. The parties named who would run the business. Here is where it now stands. Let’s go through it again, if you haven’t read the previous coverage.

December 2025. UPM and Sappi sign a non-binding letter of intent. The plan is a 50/50 joint venture.

19 March 2026. The deal is notified to the European Commission.

28 April 2026. The Commission opens a Phase II investigation. Phase II is the in-depth review. Most mergers never get one.

May 2026. UPM and Sappi sign definitive agreements.

26 August 2026. The Commission sends a Statement of Objections.

8 September 2026. The two companies conditionally nominate Gunnar Eberhardt as chief executive of the planned venture. Stephen Blyth is nominated as chief financial officer.

September 2026. A second release names four more nominees. Jan Gustafsson for human resources, Marco Eikelenboom for sales and marketing, Antti Hermonen for operations and Jan-Sander van Tuijl for supply chain.

11 November 2026. The Commission's deadline for a final decision.

A Statement of Objections is a formal letter, that is worth mentioning again. The Commission sets out a preliminary view and the companies get to answer it.

It is not a decision. It is not a fine. It is not the end of the process.

The Commission's preliminary concern is about two paper types. Coated mechanical paper, which is magazine paper. And coated woodfree paper. In the Commission's own words, the venture would "acquire market power allowing it to increase prices and decrease quality" for those customers.

UPM says it is confident it can "respond fully to the EC's preliminary concerns." Both companies still operate independently. Current leadership stays in place until closing.

Every nomination is conditional on all regulatory approvals and on completion. The companies said so themselves.

The businesses going into the venture carry a combined enterprise value of €1.42 billion. That figure excludes expected synergies. UPM's Communication Papers business is valued at €1.1 billion. Sappi's European graphic paper business is valued at €320 million. The venture would bring together 12 paper mills in Europe and the United States.

Those are the numbers the companies published. Read them as what they are. An enterprise value of contributed businesses is not a purchase price and not a market value.

Both sides give the same reason. European graphic paper demand is in long-term structural decline. There is too much capacity. Energy costs are high.

That is their stated case, on the record. Nobody is disputing that demand for magazine paper is falling.

Here is the observation, and it is the reason this sits at the top of the issue.

The 11 November decision changes the mechanism. It does not change the direction.

If the venture is approved, two large pulpwood buyers become one.

If it is blocked, the conditions both companies describe are still there. Falling demand and surplus capacity do not go away because a merger did. Capacity gets removed some other way.

Either road leads to fewer buyers at the mill gate. Only the route differs.

That is not a prediction about what Brussels will decide. It is a read on a market where the product is shrinking. The Commission is deciding how the shrinking happens, not whether it does.

If you sell pulpwood: count the mills that can realistically take your wood. Not the ones that exist. The ones that can take your species, at your haul distance, at a price that works.

If you are a small owner: fewer buyers means less room to walk away from an offer. Your negotiating position is set long before the negotiation.

If you invest in forests: buyer concentration belongs in your risk register. A growth model assumes a buyer. It rarely names one.

If you advise landowners: the sale of the wood is now a market-structure question, not only a price question.

A merger review is not an event that forest owners usually follow. It happens in Brussels, between two listed companies, about paper grades most owners never handle. But the end of that chain is your stump.

You will not get a letter when your buyer list gets shorter. Nobody sends one. The price simply arrives lower one season, and the reason is upstream and three years old. Watch 11 November. Then count your buyers either way. Sources: European Commission — Statement of Objections on the proposed UPM/Sappi joint venture, 26 August 2026 | European Commission — case M.12270 | UPM — management nominees for the planned graphic paper joint venture | UPM — definitive agreement on the graphic paper joint venture, May 2026

The Latvian State Forest Service published a revised figure on 3 September. Wind-thrown and broken timber from the storm of 22 and 23 August comes to nearly 500,000 cubic metres.

The service compiled it with the largest forest owners and managers. Most of the damage is birch and aspen. Spruce and pine were hit in smaller volumes. By region, the split is Latgale 45%, Zemgale 30%, Vidzeme 20% and Kurzeme 5%.

Two details matter as much as the total.

First, in most areas single trees and small groups came down. This is not one flattened block of forest.

Second, the service says plainly that the volume was assessed visually. Crews surveyed stands they could reach quickly. The figure may change as roads are cleared and timber is removed.

The service also notes something owners often miss. Where damaged wood poses no real sanitary risk, an owner may decide to leave it. It then counts as a biodiversity feature.

Why it matters: This is a hardwood pulpwood event, not a sawlog event. Birch and aspen at this volume land in the pulpwood grade, and a lot of it is arriving at once.

Scattered damage is also the expensive kind. Single trees spread over a wide area cost far more per cubic metre to recover than a concentrated blowdown.

The takeaway: If you hold birch or aspen anywhere in the Baltic region, watch pulpwood prices through autumn. And treat the 500,000 figure as provisional, because the service that published it says it is. Source: Valsts meža dienests — revised extent of storm damage in forest stands, 3 September 2026

New research in the Scandinavian Journal of Forest Research tested two radar wavelengths over managed boreal forest in Finland and Sweden.

L-band vegetation optical depth captured forest structure. X-band was less informative for the same job.

Two terms, in plain words. Vegetation optical depth measures how much microwave signal the vegetation absorbs. L-band and X-band are two radar wavelengths, and L-band is the longer of the two.

Why it matters: Longer waves reach further into a canopy. That is why the choice of instrument changes the answer you get.

Put this beside the first item. Latvia's half-million cubic metres is a visual assessment made by crews on the ground, and the service that published it says so plainly. Remote sensing is what is supposed to close that gap. It only closes it when the instrument matches the question.

The takeaway: If anyone offers you a satellite-based forest measurement, ask two questions. Which wavelength, and what was it validated against? "Satellite data" is not a specification. Source: Scandinavian Journal of Forest Research, DOI 10.1080/02827581.2026.2633371

Hungary's National Food Chain Safety Office announced on 11 September that the fire ban is withdrawn in four counties from 12 September. They are Győr-Moson-Sopron, Somogy, Vas and Zala.

The stated ground is rainfall in the preceding 24 hours. The office says it ended the heightened forest-fire danger in those four counties.

The ban stays in force in the rest of Hungary. Forest biomass there is still dry.

The decision was made with the agreement of the National Directorate General for Disaster Management.

Why it matters: A fire ban is an operating restriction, not a weather warning. It governs what you can burn and where you can use open flame in and near forest. Lifting it reopens work that was stopped.

Note how it was lifted. County by county, on a measured ground, with the rest unchanged. That is not how most people assume these decisions work.

The takeaway: If you run crews across regions, check the restriction where the machine is working. Not where your office is. The rule changed in four counties out of nineteen. Source: Nébih — the fire ban ends in four counties

Count your buyers.

Most owners have never written this number down. It is usually smaller than they expect. If the number is one or two, your price is not negotiated. It is announced. That is worth knowing before harvest planning, not after.

Not selling pulpwood? Run the same count for your main assortment. Sawlogs, energy wood, veneer. The exercise works on any grade you sell.

"A paper mill closing is hardly a tragedy. Nobody reads magazines any more."

Someone will say this to you. At a public meeting, or over coffee after one.

They are not wrong about magazines. That is what makes it hard. The mill still bought a third of the pulpwood in the region, and the person who said it does not know that.

Arguing loses the room. Agreeing loses the point.

Thirty seconds. No notes. What do you say? If you have no idea, this playbook is for you.

Buyer concentration is a price risk. It never appears in a yield table.

A growth model tells you what the stand will hold. It says nothing about who will be standing at the gate to pay for it. One of those numbers you can measure today. The other you have to go and count.

I wrote the Forest-Investment Dictionary with Danish forest economist Anders Tærø Nielsen. It has 151 pages, 11 chapters, 14 printable tools, and 3 calculators. Investors learn to read a forest. Foresters learn to read a term sheet.

When the market turns, the people who can read the numbers make the better calls. The price is €99. Get yours below.

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Until Thursday!

Wish you all the best: Peter

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