Europe and Russia: A region of contrasts shaping global softwood markets

Europe and Russia account for roughly 43% of global industrial roundwood supply. However, the outlook differs significantly between Russia, the Nordics, the Baltics, and Central Europe, reflecting differences in forest resources, harvest intensity, industry structure, and exposure to forest damage.

Our latest report, “Global Softwood Roundwood Supply Outlook – Europe & Russia”, examines Europe and Russia’s very different market conditions and long-term outlooks. While the region remains one of the world’s most important suppliers of softwood industrial roundwood, future growth is expected to be modest, with tighter markets and generally higher log prices through 2035.

The report is the second regional study in a three-part series analysing global softwood roundwood supply and pricing across all major regions. The first report was published in April and focused on North America, while the third report, covering Latin America and Asia-Pacific, will be released in June.

The Nordic countries remain among the most efficient and competitive forest sectors globally.

Sweden and Finland dominate regional supply, supported by advanced forest management, high mechanization, and efficient supply chains. Harvest levels are already high relative to net forest growth, leaving limited room for significant expansion. Current supply levels are expected to be maintained through improved forest management and continued strong demand for softwood products. Log prices in the Nordics have increased steadily over time and remain well above global averages. Forest damage from bark beetles and storms has increased, while environmental pressures and forest protection measures continue to limit forest area available for wood supply.

The Baltic countries have experienced rapid harvest growth over the past decade, supported by strong log demand and elevated salvage logging (see chart). However, utilization levels have reached unsustainable levels, with harvests exceeding net forest growth in some areas. Insect damage has also increased significantly in recent years. As a result, supply is expected to decline as harvest rates return to more sustainable levels. The Baltics remain an important supplier of logs to the forest industries in Sweden and Finland.

Central Europe is still adjusting after the major bark beetle outbreak that drove exceptionally high salvage harvesting between 2018 and 2022. Countries such as Germany, Austria, and Poland experienced unusually high harvest levels during this period, temporarily increasing wood supply. Softwood supply is expected to fall. Climate change, ageing forests, and increasing forest damage are also expected to weigh on long-term growth, while relatively high harvesting and transport costs contribute to elevated log prices.

Russia continues to hold the largest long-term supply potential due to its vast softwood forest resource and relatively low utilization levels. Harvest levels remain far below biological growth, particularly in Siberia and the Russian Far East. However, supply growth has been constrained by limited infrastructure, restricted access to equipment and financing, and increasing trade and policy barriers. Investment in the sector has weakened in recent years, and the loss of European markets following the Ukraine war has further reduced harvest activity. Russia retains a significant cost advantage due to low stumpage costs, but future growth will depend on improved market access, stronger Chinese demand, greater geopolitical stability, and higher wood prices to support infrastructure and harvesting investments.

Overall, Europe and Russia are expected to remain critical suppliers to global softwood markets, but future growth will be limited. Maturing forest resources, rising environmental pressures, forest damage, and constrained investment points to tighter wood markets and structurally higher log prices over the next decade.