Hello,
Swedish logs cost more than ever. Construction demand sits near pandemic lows. So Södra is cutting production by 20%. That's the European timber market in November 2025. Record prices. Collapsing demand. Mills caught in between. Meanwhile, France detected pine nematode for the first time. Germany's sawmill confidence crashed 42 percentage points in three months. And Stora Enso just produced its millionth cubic meter of CLT.
Here's what's moving European forestry this week:
🔍 The Big Story
Södra Cuts Production 20% as Record Timber Prices Meet Weak Construction
Sweden's Södra announced November 6 it will reduce production 20% at its Värö and Mönsterås sawmills during Q4 2025. The reason: timber prices hit records while construction demand collapsed.
The market paradox: Log prices reached all-time highs across Europe. But lumber demand fell to pandemic-era lows. Mills face expensive raw materials and weak sales. Something had to give. "It's a balancing act in an unusual situation, but we see that a temporary adjustment in production is necessary to manage the situation in the finished goods market and to ensure our long-term competitiveness," said Jonas Karlsson, Head of Sales and Marketing at Södra Wood.
What's driving this: U.S. construction hit pandemic-low levels. European construction shows "clear decline." The Swedish krona strengthened, squeezing export profitability. And Södra's finished goods inventory exceeded year-end targets.
The production math: Södra operates two major sawmills. Both will run at 80% capacity through year-end. That's 340,000 fewer cubic meters than planned. The cuts affect both mills equally.
Market context: This isn't just Södra. Up to 95% of German cutting capacity is affected by production cuts. The sector heads toward one of its lowest production years in recent history.
What this means for you: High log prices don't mean healthy markets. They mean supply crashed faster than demand. If you're selling logs, buyers are cautious despite high prices. If you're buying lumber, expect continued weak pricing as mills work through excess inventory. The temporary cuts suggest Södra expects market correction within months. But construction won't recover until interest rates fall and building permits increase. That timeline remains uncertain. Source: Södra Official Press Release
📊 Quick Hits
1. 🇩🇪 German Sawmill Confidence Crashes 42 Percentage Points
German sawmill business sentiment plummeted from +2% in Q2 2025 to -40% in Q3 2025. That's a 42-point drop in three months. The sector heads toward one of its lowest production years in recent history. Industry surveys show up to 95% of German cutting capacity affected by production cuts. Construction demand collapsed while log prices stayed high. The margin squeeze is severe. One data point tells the story: German sawmills face €1.8 billion in initial EUDR compliance costs plus €1.2 billion annually. Only 39% report adequate preparation. The regulatory burden lands during the worst market conditions in years.
The takeaway: Germany's sawmill sector faces perfect storm of weak demand, high costs, and compliance pressure. Source: Timber Online | Forest Machine Magazine
2. 🇫🇷 Pine Nematode Detected in France for First Time
French authorities confirmed November 3 the first detection of pine nematode (Bursaphelenchus xylophilus) in France. The Ministry of Agriculture announced the finding. This is the first confirmed case in the country. Pine nematode kills pine trees rapidly. The pest spreads through wood-boring beetles and infected wood products. It has devastated pine forests across Portugal, Spain, and other European countries over the past two decades. France now joins the list of affected European countries. Containment measures will focus on the detection site. Restrictions on wood movement from affected areas likely follow.
The takeaway: First detection in France marks pest's continued European spread. Forest owners in southwestern regions should monitor pine health closely. Source: ANSES Official Statement
3. 🇦🇹 Austrian HS Timber Acquires Swedish Sawmill
Austrian HS Timber Group signed an agreement October 28 to acquire 100% of Malå Såg AB from Setra Trävaror AB. The high-tech pine sawmill in Västerbotten, Sweden, specializes in premium Northern Pine products.
Transaction details: Target capacity of 340,000 m³ annually of kiln-dried and processed sawn timber. Products include planed material, deckings, claddings, and slats. HS Timber takes over all current employees.
Strategic value: Long-term partnership with Sveaskog (Swedish State Forest enterprise) ensures sustainable raw material supply. The mill adds production capacity in Northern Europe where HS Timber wants to grow.
The takeaway: Nordic sawmill consolidation continues as major players secure production capacity and fiber supply during uncertain market conditions. Source: Setra Group Official Press Release
4. 🏗️ Stora Enso's Austrian Mill Hits 1 Million m³ CLT Milestone
Stora Enso's Bad St. Leonhard mill in Austria surpassed one million cubic meters of cumulative CLT production in October 2025. It's the first Stora Enso site to hit this milestone since starting CLT production in 2008.
The numbers: 1,000,000 m³ total CLT production across 17 years. Current capacity around 80,000 m³ annually. The mill supplied approximately 15,000 projects worldwide. Largest single project: Arboretum in France used 20,000 m³. "Reaching one million cubic meters of CLT is not just about numbers. It's a story of continuous improvement, close collaboration, and the dedication of our entire team," said Martin Nistelberger, Mill Director.
The history: The mill was founded in 1885. It became Stora Enso's first CLT production site in 2008. That timing proved prescient as mass timber construction exploded over the following decade.
The takeaway: CLT production milestone validates long-term mass timber market growth despite current construction slowdown. Source: Stora Enso Official Press Release
5. 🇨🇦 West Fraser Closes Two Mills, Cuts 300M Board Feet Capacity
Canadian lumber giant West Fraser announced November 6 it will permanently close its Augusta and 100 Mile House sawmills by end of 2025. The closures remove 300 million board feet of annual capacity and affect 295 employees.
Market pressure: U.S. softwood lumber prices declined for four consecutive weeks through November 10. Lumber futures hit $528.50 per 1,000 board feet. That's down 14% in one month. The closures add to a wave of North American capacity reductions. Canfor reported $208 million operating loss in Q3 2025. Weak lumber pricing persists while log costs stay elevated.
The takeaway: North American mill closures reduce global softwood supply, potentially supporting lumber prices if construction demand recovers in 2026. Source: West Fraser Official Press Release
6. 🌍 EU Backs Global Carbon Markets Alliance at COP30
The European Union officially endorsed the Leaders Declaration on Carbon Markets on November 10 at COP30 in Belém, Brazil. The EU joins France, Germany, UK, China, and Brazil in recognizing carbon pricing as a key climate tool. Commission President Ursula von der Leyen confirmed support: "Carbon pricing has become a central tool to reduce greenhouse gas emissions with a strong business case for the economy and for the people."
EU track record: The EU's ETS cut greenhouse gas emissions by 50% relative to 2005. It generated over €250 billion in revenue. The system proves carbon pricing works at scale.
Forest relevance: High-integrity forest carbon credits will play larger role in corporate climate strategies if governments signal clear support. COP30 provides that signal.
The takeaway: Global carbon market coordination strengthens, potentially boosting demand for verified forest carbon credits from European projects. Source: Euronews
📅 The Weeks Ahead
November 11-12, 2025: Branchentag Holz in Cologne, Germany. Wood products, forestry, and woodworking machinery.
November 19-22, 2025: Vietnam Wood Show in Ho Chi Minh City. Asia-Pacific export opportunities for European timber.
November 24-December 5, 2025: CITES COP in Samarkand, Uzbekistan. Timber trade regulations and CITES-listed species.
November 27-30, 2025: Cairo WoodShow in Egypt. Middle East market access for European wood products.
💡 One Thing to Try This Week
Review your Q4 inventory against Q1 2026 market expectations. With Södra cutting production 20% and German sawmills facing severe capacity reductions, supply is tightening. But construction demand stays weak.
Run this quick analysis:
Current inventory levels - Are you above or below normal for this time of year?
Q1 2026 contracts - Do you have commitments that assume higher demand?
Cash flow impact - Can you handle 3-6 more months of current conditions?
If you're holding excess inventory like Södra, consider modest price adjustments to move volume before year-end. If you're running lean, current production cuts may create Q1 supply tightness if construction shows any improvement.
The market is broken: high log prices, low lumber prices, weak demand. Companies that adjust inventory now will be better positioned when things normalize.
Until Thursday!
Wish you all the best: Peter
P.S. What’s the biggest challenge you’re facing in forestry right now?
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