Although there have not been attacks on commercial shipping in the Red Sea for some time, there are still major problems and significant disruptions for shipping through the Suez Canal. As a result, vessels must take the long route around the Cape of Good Hope, which can add up to two weeks to the journey compared with normal transit times. At the same time, both fuel costs and insurance premiums are rising. The result is higher freight costs and more uncertain logistics.
For timber exports, this means that several markets in the Middle East are currently difficult to reach. Deliveries to markets such as the Persian Gulf, Saudi Arabia and Jordan are heavily affected by the current security situation. Traffic through the Strait of Hormuz is currently almost completely closed, which in practice stops or severely limits sea transport to the region. As a result, deliveries are postponed, rescheduled or redirected to other markets until the situation stabilizes.
Despite the turbulent global environment, the situation for our own operations remains relatively stable. For Norra Timber, the past year was a good one. We have had good access to raw material, maintained a stable production pace, and managed to sell our volumes successfully. Overall, our results compare well with many other players in the industry.
The outlook for 2026 is also fundamentally positive. Our sawmills are efficient and delivering according to plan. At the same time, there are challenges in the market. Over the past year, raw material costs have been high, while the Swedish krona has strengthened significantly against the dollar. For an export industry, a stronger currency means lower revenues when converted into Swedish kronor.
Here, Norra Timber has a certain advantage. Around 60 percent of our sales go to export markets, while the industry average is closer to 75 percent. This makes us somewhat less sensitive to rapid changes in the global environment. The Swedish market serves as a stable foundation for our business, which is a strategy we have pursued for several years.
At the same time, many sawmills in the Nordic region have faced a very challenging situation. At times, raw material prices have been so high that several operators have effectively paid SEK 250–300 more per cubic meter for logs than the market for finished wood products could support. This has led to significant losses and, in some cases, sharp production cuts.
The fact that production is now declining in parts of both Sweden and Finland may, over time, contribute to a better market balance. When the supply of timber products decreases, the chances increase that prices will strengthen again. The hope is that we will see rising prices, particularly for sawn spruce, and perhaps also that pine will follow upward.
For Norra Timber, we are grateful that our business model proves to be stable even in more uncertain times. When our industry operations and forestry activities work together, better conditions are created for both competitiveness and profitability – even when the global environment is turbulent.
