European sawn timber markets moved through February 2026 with prices largely stable across the main grades and destinations, but beneath that calm surface a more cautious and unsettled mood was taking hold. The outbreak of the Iran conflict added a new layer of uncertainty to an already fragile market environment for Nordic exporters, who were already dealing with high log costs, weak European construction demand and the lingering effects of Storm Johannes.<\/p>\n
Price stability masks market caution<\/strong><\/p>\n Price changes during February remained limited. In Germany, spruce 44-50\u00d7150 mm slipped by 0.77% compared with January\u2019s midpoint, while spruce 50\u00d7100 mm moved slightly higher, rising 0.80% on the back of a stronger lower-end range. Other German grades remained unchanged.<\/p>\n France showed a similarly restrained pattern. Spruce 44-50\u00d7150 mm edged up 0.81% as the lower limit increased, while the rest of the assessed grades stayed flat. The UK and Benelux were the quietest markets during the month, with all assessed grades unchanged. Overall, the market remained in a holding pattern, with buyers continuing to manage stocks conservatively and no strong directional move emerging.<\/p>\n Iran conflict sends freight costs sharply higher<\/strong><\/p>\n The conflict in Iran has had an immediate impact on global shipping, creating a significant new challenge for Nordic sawn timber exporters. By mid-March, war surcharges on container shipments to the Middle East and North Africa had risen by around $3,000 per container. That equates to more than $60 per cubic meter, or roughly \u20ac55 per cubic meter, for a standard 40-foot container carrying 45-47 cubic meters of timber.<\/p>\n With baseline sea freight costs sitting at approximately \u20ac50 per cubic meter, the additional surcharge has effectively more than doubled the shipping element of the delivered price. In practical terms, this means an increase of around 20-25% in total delivered cost, a burden that market participants say neither buyers nor sellers can easily absorb. Sources active in MENA markets reported that the new surcharges are too high to pass through, leading to the cancellation of a significant number of shipments.<\/p>\n This is especially important because the Middle East and North Africa had been among the more resilient export outlets for Nordic producers during a difficult 2025. Egypt alone was estimated to have received around \u20ac240 million worth of EU sawn softwood in the first half of 2025, while the broader MENA market had been expected to expand at an annual compound rate of around 9% through 2032, supported by infrastructure spending in the Gulf and continued housing shortages in North Africa.<\/p>\n Shipping disruption deepens cost pressures<\/strong><\/p>\n Further pressure is coming from the logistics side. Major shipping companies including Maersk, MSC and Hapag-Lloyd have suspended crossings through the Strait of Hormuz until further notice. Ships are being rerouted around the Cape of Good Hope, adding weeks to delivery times and further increasing costs. At the same time, the Houthis, whose Red Sea campaign had only recently eased following a ceasefire, have threatened renewed escalation, creating the risk of even broader disruption.<\/p>\n The freight shock is adding to existing production cost burdens. Fastmarkets senior economist Dustin Jalbert highlighted the compounding effect on logging operations, noting that higher diesel prices, especially in Central Europe, are increasing pressure on log procurement costs that are already difficult to recover downstream. Jalbert also pointed to the risk of a stagflationary effect across the wider European wood products complex, where rising energy costs could squeeze pulp and paper operations and weaken sawmill residual revenues at a time when other income streams are already under strain.<\/p>\n Swedish producers remain under margin pressure<\/strong><\/p>\n In Sweden, sawmill operators continued to work under difficult margin conditions in February. Elevated sawlog prices remained a major issue, while finished sawn timber prices in key markets were flat or only slightly lower. Sources indicated that sawlog prices are still materially above sawn timber prices for both pine, or redwood, and spruce, or whitewood.<\/p>\n The difficult conditions that made the fourth quarter of 2025 especially challenging for Swedish producers had not materially improved at the beginning of the new year. Even so, some market participants expressed cautious hope that the first quarter of 2026 could begin to mark a turning point. Some softening in sawlog procurement prices has become visible, which could provide limited relief if sustained.<\/p>\n Species imbalance and certification remain key issues<\/strong><\/p>\n The late-2025 imbalance between pine and spruce remained an active issue through February. Spruce continued to trade at a premium to pine in most markets. Although some discussion has taken place around replacing whitewood with redwood, sources said adoption in major European markets remains limited.<\/p>\n Planing mills are generally unable to make that substitution. In structural timber products such as KVH and lamellas, pine can be used for some applications, but habits in the market and customer expectations continue to slow wider change, especially because buyers still expect redwood to be priced below whitewood, even in non-visible uses.<\/p>\n At the same time, certification continues to influence purchasing decisions. PEFC remains sufficient for most buyers, but some larger clients, especially in the Benelux region, now require FSC certification in response to public procurement rules.<\/p>\n Negotiations continue as uncertainty grows<\/strong><\/p>\n Negotiations for the second quarter are currently underway, and sources told Fastmarkets that the market appears to be moving again after a long period of inertia.<\/p>\n Production curtailments in Sweden and among other Nordic producers reduced the appetite for aggressive moves in January and February. Many participants appeared to be waiting to see how larger players would act before making their own decisions.<\/p>\n In the Dutch market, especially for SLS in wider sizes and longer lengths, conditions were described as tight.<\/p>\n Outlook clouded by geopolitical and freight risks<\/strong><\/p>\n The outlook for March and for the first half of 2026 has become significantly more uncertain than it appeared at the beginning of February. The main reason is the freight shock created by the Middle East conflict. European construction demand continues to offer limited support, with residential building remaining the main drag across all major destination markets. Renovation activity and non-residential building are providing only partial relief.<\/p>\n Some Nordic producers had been counting on MENA demand to help absorb production volumes. Whether that outlet remains viable will depend heavily on how quickly the geopolitical situation stabilises.<\/p>\n Across the European destination markets covered in this assessment, sources said the immediate result is likely to be continued price stability, supported more by cautious buyer behaviour than by any real recovery in end-use demand. The question now is whether the cautious optimism that had begun to emerge around a possible first-quarter turning point can survive the growing freight and geopolitical pressures now weighing on the sector.<\/p>\n Source:<\/strong> fastmarkets.com<\/p>\n","protected":false},"excerpt":{"rendered":"