Autumn has cast a dark, even gloomy shadow over Finland's timber industry. The largest forestry companies — Metsä Group, Stora Enso and UPM — have sharply cut back their timber purchasing and harvesting. The situation is being explained by serious problems in the markets for finished products, which is, of course, true.
Another reason is that so-called Putin timber is no longer available. The industry does not talk about this openly, instead blaming its troubles on the high price of wood raw material. For decades, timber imported from Russia was the salvation of Finland's forestry sector, guaranteeing a sufficient supply of wood at an acceptable price under any economic conditions.
Now everything has changed. Walls are being built on the eastern border, both above the trees and below them. If there were still faint hopes at the start of the year that relations with Russia might be restored, those hopes have now faded away. The view is that what comes across the border from the east is more likely to be iron than timber...
New and unexpected borders have appeared in the west as well, since US President Donald Trump embarked on his unpredictable tariff policy. According to chief executive Jussi Vanhanen, Metsä Group's confidence in an economic recovery ended in April, when Trump announced 15% import tariffs on cartonboard. The situation quickly affected forest owners too, because as early as the spring Metsä Group set low timber purchasing volumes, which naturally caused alarm.
Metsä Group has no plan for resolving the situation
The situation is difficult for every forestry company in Finland. It is, however, particularly problematic for Metsä Group, which has put all its chips on a single card.
"We have no plan for resolving the situation in Finland," Juho Rantala, Metsä Group's director of wood trade and forestry services, said at the Metsälehti event held in Tampere at the end of September. Over the past ten years, the Metsä Group group has made extraordinarily large investments in Finland. Now, because of the problems described above, its new mills in Äänekoski, Kemi and Rauma are running below the capacity they need in order for the products made there to turn a profit when sold on markets around the world.
In the first week of October, talks began on changes that will affect many people working in the timber industry. One in every ten employees in Finland is at risk of losing their job. Other efficiency measures will be implemented as well. It remains to be seen whether they will be enough.
"The impossible equation"
When Russia's invasion of Ukraine began, all the major buyers of timber insisted that imported wood could be replaced with domestic wood. Perhaps they simply wanted to send a positive signal, but if the forestry companies genuinely believed it, they made a very serious error in their calculations.
The steep rise in timber prices up to this spring showed that supply and demand had never been in balance. Now a solution to this "impossible equation" has itself become impossible. That is harsh, and it means difficult times ahead for every timber supply chain. Worst of all, there is no light at the end of the tunnel, and the situation will most likely remain chaotic and unpredictable for several more years.