It’s always been said that predicting market situations, price trends and changes in them is challenging. However, in a normal situation forecasts have usually been very close to what is realised, particularly within a short time span. The sawn timber business has always been different to many other industries in a certain way. We have often seen changes that are significantly faster than those in other sectors of industry, in both a positive and negative direction in terms of demand and development in prices. Who could have predicted at the beginning of this year the situation where a boom in demand and prices is now happening and looks set to continue at least until the end of the year? What the situation will be at the start of next year and thereafter is surely a subject for the thoughts and assessment of everyone who is in the field. So now there would surely be a use for that proverbial crystal ball, so that we could take a peek into the future and at where we’re headed...
The demand for sawn timber is at a globally excellent level, leading to an unbalanced demand/supply situation. The reasons for this are undoubtedly known by everyone, including that the renovation of households and yard construction has been growing at a rapid rate during the corona period, while the USA’s demand for sawn timber and processed products has also exceeded all expectations. At the same time, for example, the delivery amounts of Russian sawn timber producers to their main markets have been lower than normal. However, despite these ‘disruptive factors’, I consider that sawn timber, as an environmentally-friendly raw material with many different applications, is at last getting the appreciation it deserves and that demand for it will be strong in the future as well. How well production can satisfy the global demand for sawn timber in the future remains to be seen.
It’s surely no secret that the very high price rises we’re seeing at the moment will level off with time, but I believe that we won’t see dramatic turns into a negative direction in the prices of sawn timber any more in a repeat of history, rather that the prices of sawn timber and the products made from it will remain at a high level. This will naturally support the profitability of the whole chain and make the business operations in the field profitable and aspiring towards development, even in the long term.
I have mentioned many times in our Customer Newsletter that whatever the market conditions are, we seek to develop our operations continuously to serve you, our customers, even better than before. The operating model of UPM Timber has been revamped since the autumn of 2020 and changes have been made to our organisation to improve our internal operations to an even more effective level. Our most important objective for changes is that we will be the first choice for our customers as a supplier of sawn timber in the future as well. The changes will not necessarily be directly visible to the customers because our familiar sales team people and customer agents will continue in their roles as normal.
On 1.6.2021, we also gained a new leader for UPM Timber, Antti Koulumies. Antti has solid experience and know-how in business management, development of functions and strategy. He came to UPM Timber from a completely different sector of industry. I see it as a very positive thing that we, who have already been in the sawn timber field for a long time, are getting new thoughts, ideas and possibilities to renew our operations and develop them further, with a new pair of eyes and perspectives.
In the spirit of collaboration, I wish our customers around the world a safe and very good summer, as well as success now and in the future!
Mikko Hyvärinen
