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Pulp exports from Finland will continue in a positive trend this year and next year because of increasing production capacity.
May 2, 2016 - Growth in the value of Finnish forest industry exports this year is driven by pulp and paperboard exports. Weak price trend is suppressing sawn timber exports. Next year, new investments and increasing demand are expected to raise Finnish forest industry production. Weak outlook for paper demand will continue and exports are forecast to decline both this and next year.
Paper production down, paperboard exports increase
The production and export of paper in Finland will reduce by 3 - 4 percent this year and 2 -3 percent next year. This is explained by announced or already realized capacity closures and the downward trend in demand. The average export price will rise slightly but a more significant increase would still require more closure of machines in Europe.
Despite declining production, paper products still account for about 40 percent of Finnish forest industry's export earnings. Paperboard production in Finland increases significantly this year and next year owing to growing production capacity. The increasing supply of paperboard in Europe will decrease average export price of paperboard from Finland.
Increasing supply will decrease pulp's export price
This year and next year a number of large, mainly eucalyptus pulp-producing, new factories will see daylight. Pulp exports from Finland will also continue in a positive trend this year and next year because of increasing production capacity. Softwood pulps global supply increase is expected to be moderate. The increased supply of hardwood pulp will, however, decrease the price of softwood pulp as well and therefore decrease Finland's average export price of pulp. Metsä Group's bioproduct factory will start in autumn 2017 and will not affect the price development of pulp for the forecast period.
PTT's full, two-page report with graph's is available at: PTT Forest Industry Spring 2016 (400k, pdf).
Pellervo Economic Research (PTT) is a non-profit organization that carries out policy-oriented research on general economic development and issues relating to agricultural and food economics and forestry and wood economics. To learn more please visit: http://ptt.fi/