European wood and pulp industry economic instability

The European wood and pulp industries are facing significant economic instability driven by rising raw material costs and structural market imbalances.

In Austria, the pulp manufacturer Austrocel reported that sawdust prices surged from approximately 115–135 euros per ton in late 2025 to over 200 euros per ton. CEO Wolfram Kalt warned that because the company operates in international markets, it cannot easily pass these regional costs to customers, potentially threatening the industry’s regional viability. The Austrian Wood Industry Association linked these high prices to a weak construction sector and international supply chain disruptions.

Similarly, the Nordic sawmill industry is experiencing intensifying instability. Major companies including Stora Enso, Moelven, Holmen, and Södra have reported layoffs or operational changes. Recent developments include Stora Enso closing its Veitsiluoto sawmill in Finland and Moelven ceasing operations in Årjäng. These follow previous closures at Vida in Urshult and Orrefors, and Bergkvist Siljan in Mora.

Industry advisor Johan Freij noted a structural imbalance where timber prices remain pressured by a weak international construction market even as raw material costs rise. He warned that rising interest rates and capital costs could force even modern, well-invested sawmills to shut down, rather than just older, inefficient facilities. This instability is compounded by a growing structural imbalance where production capacity exceeds the available raw material supply, further exacerbated by a weak international construction market, particularly in the United States, which contributes to plummeting timber product prices.