Finland`s wood industry is warning of a potential shortage of timber raw materials in the coming years. Investments in modern sawmills and increased lumber production capacity are raising demand for sawlogs, while forestry restrictions, rising wood prices and changing market conditions are creating new challenges for timber manufacturers and wood processors.

Finnish Lumber Production and the Challenge of Wood Supply

🪵 Finnish sawmills produced approximately 11.7 million cubic metres of sawn timber in 2025, representing a 7% increase compared with 2024. However, during the first half of 2026, lumber production declined by approximately 3%, reaching around 6.1 million cubic metres.

The Finnish Sawmills Association (Sahateollisuus ry) has highlighted concerns about the long-term availability of industrial roundwood. Expanding sawmill capacity requires a predictable supply of softwood logs, particularly spruce and pine, while forest conservation and ecological restoration measures may affect harvesting opportunities.

One example is Finnish timber producer Keitele, which is investing approximately EUR 40 million to increase annual sawmill capacity from 420,000 to 600,000 cubic metres of sawn timber. The expanded facility is expected to require almost 1.3 million cubic metres of logs annually.

These investments demonstrate the importance of securing reliable wood supplies throughout the Nordic timber industry.

Rising Log Prices Put Pressure on European Sawmills

📈 Raw wood prices have increased significantly over the past 15 years, creating a widening gap between log procurement costs and achievable lumber selling prices.

In Finland, spruce sawlog prices have increased by approximately 62% over this period, while export prices for spruce sawn timber have risen by only 34%.

The difference is also substantial for pine: pine sawlog prices have increased by approximately 57%, compared with only 14% growth in export prices for pine lumber.

Between January and May 2026, Finnish sawn timber exports reached approximately 3.3 million cubic metres, down 6% year-on-year. Export value declined by 5%, reaching approximately EUR 870 million.

For sawmills, timber traders and wood product manufacturers, these developments highlight the need to monitor procurement costs, international lumber prices and demand in key export markets.

Read more about high log prices across Europe and their impact on the wood industry.

Could a Timber Shortage Affect the European Wood Market?

🌲 A potential reduction in the availability of Finnish sawlogs could influence European timber prices, softwood lumber supply, wood imports and exports, and international purchasing strategies.

However, a widespread timber shortage has not yet been confirmed. The warnings primarily concern future raw material availability and the potential imbalance between industrial processing capacity and accessible forest resources.

Finland`s Pellervo Economic Research (PTT) expects activity in the wood market to recover toward the end of 2026 and during 2027 as existing inventories decline.

For European wood importers, lumber distributors, construction timber suppliers and manufacturers, the situation reinforces the importance of diversifying sourcing markets and monitoring timber availability by species, grade and geographic region.

Explore our analysis of wood resource availability in Romania and Europe to understand how forest resources, industrial demand and logistics affect timber supply.

Outlook for the Wood and Timber Industry

The warnings from Finnish sawmills reflect a broader structural challenge facing Europe`s wood industry: balancing industrial investment, sustainable forest management and reliable access to timber raw materials.

While new production capacity may improve efficiency and competitiveness, high sawlog prices and uncertainty over future harvesting volumes could continue to affect sawmill profitability.

Recent production adjustments across Northern Europe also demonstrate the importance of aligning lumber manufacturing capacity with market demand and wood availability.

Read our report on European sawmill capacity reductions and changing lumber market conditions.

For businesses involved in wood processing, timber trading, construction materials and wood product exports, monitoring wood prices, lumber production, timber imports, exports and industry forecasts remains essential for strategic planning.

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Sources:
Pulpapernews.com
Globalwood.org
PTT.fi
Luke.fi