After positive signals for the Swedish pulp and paper industry in 2024, 2025 has started weakly and the trend looks set to continue. This is according to a new market report from the Swedish Forest Industries Federation.

During the first seven months of the year, pulp and paper production fell by 2.5 percent compared with the same period last year. Consumption of Swedish pulp for domestic production during the period was 2.4 percent lower than in the corresponding period in 2024.

Sales of market pulp to independent Swedish mills fell sharply, by 13 percent.

At the same time, exports of Swedish market pulp increased by 4.7 percent, driven by exports to China and the US.

Exports are partly saving the pulp industry. According to the Swedish Forest Industries Federation, exports were higher than they have ever been during the same period in the last ten years, despite the recent negative currency effects. The reasons for this are considered to be changes in inventory and speculative purchasing behavior, especially from China. However, increased export volumes are not considered to fully replace lost pulp production.

New tariffs reduce uncertainty
Paper and cardboard production fell by 2.8 percent during the first seven months of the year compared with the same period in 2024. Deliveries were also lower due to reduced exports.

Although volumes of paper and cardboard shipped to the US rose by 0.9 percent, the European market, which accounted for 73 percent during the period, is described in the Swedish Forest Industries Federation's report as “...still very weak, as is the Asian market.”

"The economy is still very weak in Europe, which is our largest market for paper and cardboard. At the same time, competition in packaging materials is intensifying, and we see a risk of even more congestion in Europe as trade flows are redirected as a result of the US's new tariffs," says Charlotte Dickens, market analyst for pulp and paper, in a comment on the market report.

The US's new import tariffs on Europe of 10-15 percent on wood products, paper, and cardboard are reducing the uncertainty that has resulted from the trade war somewhat, according to the Swedish Forest Industries Federation.

"Forest industry products have been traded duty-free across the Atlantic for decades. The fact that the US is now introducing tariffs is a clear step away from free trade. At the same time, the announcement provides at least some predictability, which, together with higher demand, is crucial for restoring confidence in the future and getting the wheels rolling again," says Charlotte Dickens.

Source: Swedish Forest Industries Federation