Global Consulting Alliance

FOREST SECTOR OUTLOOK 2026-Q2

To view the complementary 2026-Q2 report, click here 

2026-Q2 – Highlights:

• The global economic outlook weakened during Q2 2026 as the Middle East conflict increased commodity prices, inflation expectations and financial-market uncertainty. In its April 2026 World Economic Outlook, the IMF projected global growth of 3.1% for 2026 and noted that inflation was expected to rise during the year before resuming its decline in 2027.
• Energy and commodity markets became a major source of economic pressure. The World Bank projected that energy prices would rise by approximately 24% in 2026, while overall commodity prices would increase by around 16%. Fertiliser prices were expected to rise by approximately 31%, driven partly by higher energy costs and disruption to production and shipping routes.
• The forest sector remained caught between weak cyclical demand and stronger long-term fundamentals. Demand for construction timber, panels and related wood products continued to be constrained by elevated borrowing costs and subdued residential development in several major economies.
• Australian sawlog prices are expected to increase in nominal terms, broadly in line with historical trends, but to remain flat in real terms. Timber demand continues to show modest signs of improvement.
• AgriHQ reported in June that New Zealand A-grade export log prices for August had fallen by approximately NZD 9/m³ at the wharf gate. This reflected a USD 4/JAS decline in China CFR prices and a USD 1.30/JAS increase in shipping costs. Wharf inventories in China remain stable, supported by steady demand and offtake.
• China retail sales contracted in June for the first time since 2022, highlighting persistent consumer caution that has continued well beyond the pandemic. Investment weakness has also re-emerged, with the investment gauge declining by 4.1% during the first five months of 2026 compared with the same period in 2025; the weakest performance since the early stages of the Covid-19 pandemic.
• During the first four months of 2026, China imported 7.95 million m³ of softwood logs, a decline of 7.6% compared with the same period in 2025.
• China’s softwood-lumber imports declined by 27.2% to 3.70 million m³ during the first four months of 2026 compared with the same period in 2025.
• According to industry reports, the spring recovery anticipated by many European sawmills did not materialise. Sales activity remained subdued through May and into June, with buyers relying on inventories accumulated in late 2025 and early 2026 and purchasing only for immediate requirements. Price surveys by Global Wood Market Info and EUWID indicate that softwood-lumber prices were broadly stable during recent months, with spruce structural timber delivered to Germany at approximately EUR 320 – 340/m³. Some producers extended maintenance shutdowns or reduced operating capacity to avoid accumulating inventory over the summer.
• Standing-sale sawlog prices in Finland remained strong in May, with spruce sawlogs rising to almost EUR 83/m³ – over bark, and pine sawlogs exceeding EUR 77/m³. However, trading volumes weakened considerably. May purchase volumes were 30% lower than a year earlier, while cumulative roundwood trade from January to May was 28% below the corresponding period in 2025 and 18% below the five-year average.
• As in Finland, pulpwood prices have declined in Sweden. Forest-owner associations and companies, including Södra and Mellanskog, have reduced their price lists. Sawlog prices have been cut by as much as EUR 15/m³- under bark, or SEK 150/m³, while pulpwood price reductions have reached approximately EUR 9/m³, or SEK 90/m³.
• Estonia coniferous sawlog prices, averaged across a range of diameters, increased from the beginning of the year to approximately EUR 97/m³ roadside, measured under bark.
• International sanctions on Russia have weakened timber demand, disrupted logistics, increased costs and reduced the profitability of harvesting operations. The sector is also facing growing equipment-maintenance challenges. By 2028, an estimated 90% of Russia’s imported harvesters and forwarders could be significantly affected, while domestic manufacturers currently produce only a limited range of replacement models. Demand for replacement equipment is estimated at between 3 500 and 10 000 units over the next two to three years.
• Russian sawlog production declined by 18% year on year in May 2026 and was 36% lower than in April.
• Russian lumber production declined by 3% year on year in May 2026 and was 14% lower than in April.
• US softwood-lumber production declined by 1.9% year on year in the first quarter of 2026 to 8.83 billion board feet, equivalent to approximately 14.2 million m³ net.
• Canadian lumber production declined by 10.2% year on year during the first four months of 2026 to 6.0 billion board feet, equivalent to approximately 9.7 million m³ net, according to COFI Connect.
• The US lumber market is moving towards a tighter balance between domestic supply, imports and demand following the closure of approximately 6 billion board feet (10 million m3 – net) of production capacity over the past three years.
• Softwood roundwood prices in the second quarter of 2026 changed by between a decrease of USD 1 and an increase of USD 5 per green short ton compared with the previous quarter. Prices in the Pacific Northwest remained broadly stable, while the South Atlantic and Northeast recorded increases of USD 2 and USD 5 per green short ton, respectively. Year on year, prices increased by 7% in both the Pacific Northwest and the Lake States. By contrast, prices declined by 17% in the South Atlantic, 3% in the South Central region and 2% in the Northeast.
• Large US timberland transactions were relatively subdued during the second quarter of 2026 compared with the end of 2025, although current market activity indicates that further sales may be forthcoming.
• Risks for the second half of the year have increased because of the potential imposition of additional tariffs on Brazilian imports. The US Trade Representative (USTR) has been reviewing Brazil under Section 301 since 2025, a provision that allows the United States to impose tariffs in response to allegedly unfair trade practices. The investigation also considers concerns related to illegal deforestation On July 15, 2026, the United States Trade Representative (USTR – Billing Code 3390 F4) confirmed a 25% tariff on imports from Brazil, subject to a defined list of exceptions. Solid pine wood products (plywood, moulding, and lumber) were not included among the exempted items, thereby confirming the base case scenario. By contrast, pine and eucalypt pulp, wood pallets, and pig iron (green charcoal) were granted exceptions and will not be subject to the new tariff.
• Mill-gate prices at Uruguay’s pulp mills have declined in recent months, with the decrease estimated at between 5% and 10%.
• Uruguay’s eucalyptus sawlog exports maintained a strong pace during the second quarter of 2026, with volumes exceeding those recorded during the same period in 2025. The average free-on-board price was approximately USD 160/m³ for logs with a small-end diameter of 30 cm or more, broadly unchanged from the previous year. Premium pruned eucalyptus logs with a small-end diameter of at least 40 cm achieved prices of more than USD 200 – USD 230/m³ free on board.
• Timber markets in West and Central Africa remained relatively stable, with selected log and sawnwood prices strengthening as Chinese buyers returned to African markets. Higher log prices supported Central Africa’s timber export index, although this occurred while several producing countries continued to consider or implement restrictions on raw-log exports.

To view the complementary 2026-Q2 report, click here 

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