European Forestry Pulse #46 🎄

Hello and Merry Christmas,

Russia is winning the China lumber war. Nordic exporters are losing ground.

Wood trade data tells the story. Russian lumber captures more of China's import market. Nordic mills see their share shrink. American producers stay home instead of competing for Chinese buyers.

This isn't temporary. It's a structural shift. European exporters need alternative markets now.

Meanwhile, China's total sawnwood imports fell 12%. CEI-Bois welcomed the EU Housing Package. Valmet plans 950 layoffs in Finland. Algeria wants more European softwood. And REI became the first buyer of CCP-labeled forest carbon credits.

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

The global lumber trade is reshaping. Russia gains market share in China. Nordic producers lose ground. American mills focus on domestic demand.

The Russian advance: Russian lumber exports to China continue growing. Sanctions haven't stopped the flow. Chinese buyers prefer Russian prices. Transportation costs favor Russian suppliers. The Siberia-to-China route is simply shorter.

The Nordic retreat: Swedish and Finnish lumber loses competitiveness in Asian markets. Higher production costs hurt. Longer shipping distances add expense. Currency movements don't help. Nordic market share in China is declining.

The American pivot: US sawmills could compete for Chinese business. They chose not to. Domestic demand absorbed most production. American builders pay enough. Why ship across the Pacific?

The numbers: China remains the world's largest lumber importer. But supplier shares are shifting. Russia grows. Europe shrinks. North America stays local.

Why this matters: European softwood producers built Asian export strategies over decades. Those strategies face new realities. Russian competition isn't going away. Chinese demand preferences are changing.

The quality angle: Nordic lumber markets itself on quality and sustainability. Chinese buyers increasingly prioritize price over certification. That's uncomfortable for premium producers. Quality premiums are harder to capture.

The European response: Some mills redirect to MENA markets. Algeria shows growing demand. Middle Eastern construction creates opportunities. But these markets won't replace China's scale.

The domestic option: European construction demand remains weak. Interest rates crushed building activity. Mills can't pivot to domestic markets that aren't buying. They need export alternatives.

What this means for you: If you supply Nordic sawmills, watch their export market exposure. Mills losing Asian markets may reduce production. That affects log demand.

If you compete with Russian lumber anywhere, expect pressure. Russian producers undercut on price. They accept margins Nordic mills can't match.

If you're exploring alternative markets, consider MENA opportunities now. Algeria, Egypt, and Gulf states show demand growth. Early movers establish relationships. Latecomers compete for scraps.

The bigger picture: Global trade patterns never stand still. Russia's Ukraine sanctions created economic isolation. But timber found ways around barriers. Chinese buyers found willing Russian sellers. Nordic producers found reduced market access.

Geography matters. Siberia is closer to Shanghai than Stockholm is. No amount of marketing changes that. Source: Timber-Online - Trade Flows | Global Wood Markets Info

The European Confederation of Woodworking Industries (CEI-Bois) welcomed the EU Housing Package on December 17. The package supports sustainable construction materials. Wood gets explicit policy backing.

The Housing Package aims to boost affordable housing across Europe. It encourages sustainable building materials. Timber construction fits perfectly. The policy creates demand opportunities for European wood products.

CEI-Bois called it a positive signal for the sector. Wood construction needs policy support to scale. Building codes often favor concrete and steel. The EU package shifts that balance.

The takeaway: European policy now explicitly supports wood construction. Timber demand could benefit as the Housing Package implements. Source: Interior Daily - CEI-Bois highlights timber as key to Europe's housing future

China imported 18.34 million cubic meters of sawnwood in January-September 2025. That's down 12% from the same period in 2024. Weak construction demand drove the decline.

China's property sector crisis continues. New building starts remain depressed. Lumber demand follows construction activity. Less building means less wood imports.

For European exporters, this confirms a difficult market. China isn't buying as much. What it does buy increasingly comes from Russia. The double challenge: smaller market and tougher competition.

The takeaway: China's lumber demand dropped 12% year-over-year. European exporters face both weaker demand and stronger Russian competition. Source: Sarawak Tribune - China's Sawnwood Imports Plunge in 2025

Valmet announced plans for over 950 temporary layoffs in Finland during first half of 2026. The paper and pulp equipment manufacturer faces order weakness. Production adjustments follow.

The layoffs affect multiple Finnish locations. They represent temporary measures, not permanent terminations. Valmet expects market conditions to improve eventually. But near-term demand doesn't support current staffing.

Equipment manufacturers signal sector health. Valmet's layoffs confirm pulp and paper producers aren't investing. Weak final demand reaches back through the supply chain.

The takeaway: Major equipment supplier cuts workforce as customer investment slows. Paper and pulp sector weakness reaches machinery makers. Source: Valmet Press Release

Algeria shows increasing appetite for European softwood lumber. Timber-Online reported growing deliveries to the North African market. Algerian construction drives demand.

The MENA region offers alternative markets for European producers facing Asian competition. Algeria, Egypt, and Gulf states need building materials. European softwood meets quality requirements.

Transportation routes favor Mediterranean suppliers. Spain, France, and Italian ports reach Algeria quickly. Northern European producers face longer distances but still compete.

The takeaway: Algeria offers European softwood producers an alternative export market. MENA demand grows while Asian markets tighten. Source: Fastmarkets - European Sawn Timber Market Trends

Austrian wood pellet prices reached €366 per tonne for loose delivery as of December 22. Bagged pellets cost €486 per tonne. Prices reflect stable winter heating demand.

Pellet markets operate separately from lumber markets. Heating season drives consumption. Production uses sawmill byproducts primarily. Prices indicate bioenergy market conditions.

European pellet demand remains strong despite milder weather in some regions. The energy transition supports long-term biomass heating. Forest owners selling sawmill residues benefit from stable pellet demand.

The takeaway: Austrian pellet prices stable at €366-486/t depending on delivery format. Bioenergy demand provides steady market for wood residues. Source: Holzpellets.net

REI (Recreational Equipment Inc.) became the first buyer of CCP-labeled forest carbon credits on December 4. The outdoor retailer received 15,000 improved forest management removal credits. These came from the Family Forest Carbon Program.

The purchase validates the CCP certification pathway. Verra's Core Carbon Principles label signals highest verification standards. REI's purchase shows corporate buyers accept the new standard.

For European forest carbon projects, this sets a benchmark. Buyers like REI want premium verification. CCP-labeled credits command that trust. Projects meeting this standard access the best buyers.

The takeaway: First commercial delivery of CCP-labeled forest credits completed. Corporate buyers accept the premium verification standard. Source: American Forest Foundation

My second article just published on Fordaq: "The Story We Forgot to Tell: Forestry's Achievements."

Last month I wrote about forestry's PR failures. How we lost public opinion to industries burning fossil fuels. This piece flips the script. It covers what we should have been saying all along.

European forests grew by 9% since 1990. We sequester 10% of EU emissions annually. Sustainable harvest rates stayed below growth for decades. Wood construction stores carbon for generations. These are facts. We just never promoted them.

The industry perfected sustainability. Then forgot to tell anyone. While NGOs built narratives, we built forests. Now we need to build communications too.

Read it here: The Story We Forgot to Tell

The takeaway: Forestry has achievements worth promoting. Start telling the story. Source: Fordaq

December 30, 2025: End of year market activity

January 2026: EU CRCF certification body applications open

December 30, 2026: EUDR deadline for large/medium operators

June 30, 2027: EUDR deadline for micro/small enterprises

Map your export market exposure to shifting trade patterns. Russia gaining China share affects everyone selling softwood internationally.

Twenty minutes, strategic value:

Nordic producers losing China share need alternatives. MENA demand is growing. Early movers build relationships now. Those who wait compete with everyone else later.

The lumber trade map is changing. Make sure you're reading the new map, not the old one.

Until Tuesday!

Wish you a merry Christmas: Peter

P.S. What’s the biggest challenge you’re facing in forestry right now?
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