Due to weak demand and above-average stock build-up, Swedish company Södra will reduce output of sawn timber.
Production at the company’s sawmills will be individually fine-tuned based on product and market segment, the company said. Södra plans to downscale output of sawn timber by roughly 100,000 m³ year-on-year between August and December 2022. The reduction is broadly equivalent to between 10 and 12 per cent of the volume sold by Södra Wood in the second half of 2021. Södra Wood reports that its eight sawmills produce over 2 million m³ of sawn timber and wood products annually.
Peter Jhaveri, head of Södra Wood, said that the company must brace for weaker demand for sawn timber and wood products in the short term due to rising inflation and higher interest rates in Europe and the USA. In view of the current uncertain economic climate, the company believes that the situation on the sawn timber market could worsen or recover. Södra therefore does not rule out that further output cuts may be necessary. On the other hand, the company is also prepared to skip production cuts in autumn if the market takes an unexpected, positive turn.
