During past two years Europe have witnessed a global pandemic and war starting inside its boarders. Two back-to-back crises have created a snowball effect to the European economy , causing production costs also in the paper and board industry to soar. Impact of the cost inflation is not the same for everyone, but what should the producers do to be in the winning side?.
The timber market dynamics have been turbulent the past few years due to supply and demand shocks. The ongoing war in Ukraine will reshape the wood supply from Russia and Belarus to Europe and the descending economic iron wall may prepare ground for new major disruptions.
The war in Ukraine inflicted an economic shock and upheavals on the forest industry value chain. The biggest impact on European factories and competitiveness takes place via rising energy prices. This concerns especially large mills running on Russian gas. New, energy-efficient lines strengthen their position in the cost competitiveness curve, increasing the gap to competing mills. CO2 emissions permits, chemicals and freight will become more expensive and weaken Europe's global competitiveness.