“We are using satellite imagery to identify and quantify spruce bark beetle infestations. I estimate we’ll have a good idea of the situation in September, but we’re already seeing that infestations are worse than last year. Substantial measures are now needed to prevent a further acceleration of infestations,” says Senior Vice President Holmen Forest, Sören Petersson.
These clear indications of significant spruce bark beetle infestations come at a challenging time as the European market is saturated with wood products from affected areas in Germany and the Czech Republic. To save as much as possible of the wood’s value, Braviken temporarily stop sawing pine and instead sawing spruce intended for export to the US.
“We are having difficulty allocating all spruce products to Europe so we are starting to sell to the US. It’s a large market and we see good opportunities to sell some of our volumes there. In practice, this involves us temporarily stopping the sawing of pine and introducing a range of spruce of different lengths suited to the US,” says Senior Vice President Holmen Wood Products Johan Padel. “Sawing of pine will resume in the first half of 2020.”
“The US is the world’s largest wood market and is of interest to Holmen Timber, both currently as we have a higher percentage of spruce, but also in the long term as we are increasing our overall production volume. We have previously carried out sample deliveries to the US and know the market well, but we are now moving to a larger scale” says Johan Padel. “There are also market opportunities for logs that have some blue-stain that would otherwise have become coniferous pulpwood.”
The high level of supply, pricing pressure on spruce wood products in Europe and high transportation costs to the US mean we need to adjust the price of logs down.
“From a market perspective, with high inventory levels, the trend should be to reduce production, but we now need to get to grips with these bark beetle infestations and save spruce forests for the future,” says Holmen Forest Marketing Director Andreas Rastbäck. “We need to work together with all forest owners on an active inventory programme and increase efforts in those forests where infestations are underway.