Fibre customer magazine 2025

Global softwood pulp supply on the decline

In the future, the production of softwood pulp will face increasing environmental and regulatory pressure across all key production markets. Only the industry’s most competitive operators will be able to benefit from the resulting decrease in global supply.

Text: Matti Remes Photos: Metsä Fibre

The demand for long-fibre softwood pulp is expected to increase as the global economic outlook improves. However, production will be subject to various kinds of pressure in the next few years in the most important production markets in Europe and North America. Petri Jokinen from Jay Partners Management Consulting says that the biggest future challenges are related to the availability of raw material. “The raw material supply for softwood pulp is pretty much at full capacity everywhere in the world. There are not many places that can increase the production of softwood pulp in a financially sound manner,” says Jokinen. Marko Summanen , VP at consultancy agency Resource Wise, is also expecting to see some scarcity in the supply of softwood pulp as the demand for market pulp picks up and customers start refilling their empty stores. “For suppliers of softwood pulp, the outlook is quite good. The most competitive industry operators with functioning wood supply will reap the biggest benefits,” estimates Summanen.

In North America, production chains are also challen- ged by extreme weather conditions brought on by climate change. In British Columbia, global warming has increased the number of forest fires and the amount of insect damage, which together have reduced the availability of wood raw materials. Additionally, the closure of sawmills has decreased the availability of sawdust. In North America the supply of pulp across the region is impacted by the fact that much of the production is spread out among relatively small and old mills. Their efficiency cannot compete with Nordic mills, which have invested in new technology. For example, unlike in Finland, the sawmill industry has led the way in the North American forest industry, and the necessary pulp industry has been connected to it. Jokinen says that for decades there have been no significant investments to improve or increase the efficiency of softwood pulp production. “In the long term, it means that many mills will inevitably be permanently closed. This may make the supply even scarcer than before.”

Challenging times in North America

Regulation restricts the use of forests in the EU

Pulp producers in North America have been under particu- larly heavy pressure in recent years. In Canada, the availability of raw material has been poor because of reduced felling quotas and new logging restrictions. Metsä Fibre’s Business Intelligence Manager Teppo Vainio thinks that this will have long-term consequences. “The reduction in felling quotas makes it difficult to access timber at a reasonable price. It increases the distance the raw material is transported too.”

Summanen points out that, in Europe, the supply of softwood pulp will be impacted mainly by regulations restricting the use of forests. The EU is trying to achieve this through various policy programmes and legislation. “The EU is facing a lot of political pressure to restrict the use of forests,” he says. The negative impacts of climate change are also threatening to weaken the supply of wood in Europe. The forest damage

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