Forest Products Industry

Conlegno warns Gulf freight rates have jumped from US$500 to US$4,000 and DACH log prices are holding at €148/m³ — leaving Italy’s 2,000-plus mill operators running at near-zero margins.

Italian sawmills are running at near-zero or negative margins as Gulf container freight has jumped from US$500 per container to as much as US$4,000, whilst log prices across the DACH region of Germany, Austria and Switzerland remain at €148 per cubic metre. That is according to the latest Conlegno Study Centre report published on Tuesday, May 5 which warns that the conflict in Iran that closed the Strait of Hormuz, elevated roundwood prices and rising energy costs are eroding profitability across more than 2,000 member companies.

The perfect storm is hitting the sector,” the report finds.

And whilst weak European demand and oversupply would normally drag raw material prices lower, log values have instead remained historically high across the corridor, leaving Italian sawmills caught between elevated input costs and thin downstream pricing power. Conlegno describes the dynamic as a divergent binary effect, where soft demand fails to feed through to lower roundwood costs, squeezing the cash margin out of every cubic metre milled.

As it stands, Italy needs around four million cubic metres of softwood a year – the framing lumber, pallet wood and panel feedstock that supplies its construction and packaging sectors. Italian forests cover only about 20 per cent, with the rest shipped from Germany, Austria and the Czech Republic. That import exposure worsened sharply after Storm Vaia and the bark beetle infestation cut Trentino’s annual log supply from 500,000 cubic metres to as low as 250,000 cubic metres, with 2025 production projected at 450,000 cubic metres – well short of Trentino’s 1.25 million cubic metre post-Vaia milling capacity.

It traces back to Hormuz.

Following the Iranian Revolutionary Guard action that closed the Strait of Hormuz on 28 February, industrial diesel prices across Asia have climbed 140 per cent and ocean freight surcharges of up to US$5,000 per container have been baked into trade lanes that depend on Gulf transit. Maersk has separately applied to US regulators for an emergency bunker surcharge of US$200 per TEU on head-haul routes and US$100 per TEU on backhaul, with Drewry’s World Container Index holding at US$2,287 per 40-foot container as of 2 April.

It comes as Wood Central reported that the Hormuz crisis has driven Asian panel prices up by 15 per cent, with Indian wood panel makers raising prices by five to 15 per cent, and a Federation of Malaysian Manufacturers survey finding that nine in ten firms are either already affected or expect an impact within four weeks. The International Tropical Timber Organisation charts an industry-wide repricing from Kuala Lumpur to Bangalore to Ho Chi Minh City, with Italian panel prices rising by five to ten per cent – roughly half the Asian rate.

On the panel side, the European Commission’s 14 April 2026 decision to finalise definitive anti-dumping duties of 5.4 per cent on Brazilian softwood plywood — applied across an EU softwood plywood market valued at €600 million per year, of which €216 million was previously imported from Brazil –  has trimmed one source of low-cost competition for Italian and wider European panel makers. But that relief has been overrun by a sharper rise in log, energy and glue costs, with OSB up around ten per cent since the start of the year and particleboard and pine plywood also climbing across European mills.

Whilst Italian sawmills have modernised through Industry 4.0 investments and improved processing flexibility over the past 15 years, the wider continental sector continues to operate under structural pressure on raw material costs, with the European Organisation of the Sawmill Industry warning at the International Softwood Conference in Oslo last October that rising input prices are denting earnings across the continent. “Raw material prices have increased across Europe, denting profitability in the industry,” Tommi Sneck, president of the European Organisation of the Sawmill Industry, told delegates.

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The post ‘Perfect Storm’ Hits Italy’s Sawmills as Margins Run Near Zero appeared first on International Forest Industries.

WorkSafe New Zealand is partnering with Verian (formerly Kantar Public and Colmar Brunton) on the latest Workforce Insights Program survey to better understand the challenges and realities facing employers and workers in the forestry sector. Source: Timberbiz The survey is open until Friday, 29 May 2026. The results will be used by WorkSafe New Zealand to help improve health and safety in our sector. Key things to know: The survey takes about 15-minutes to complete. Everyone who completes it goes in a draw for NZ$500, as a thank you for taking part. Everything you say is confidential. Only the Verian research team will know who has completed the survey. Worksafe encourages you to take part in this survey, which has provided encouraging insights about forestry and other industries in recent years. It helps track health and safety performance over time, examining things like employer health and safety maturity; worker engagement, participation, and representation; and the impact of workplace safety culture. If you have any issues completing the survey, please contact Liam from Verian at liam.williams@veriangroup.com You can access the survey at https://safetree.createsend1.com/t/r-i-tuqjhtt-l-j/

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As extreme droughts become more frequent and severe, forests around the world are dying off at alarming rates. However, the interaction between tree species’ physiological strategies and local microenvironments that shapes landscape-scale dieback patterns remains poorly understood. Source: Timberbiz In a study published in Forest Ecology and Management on 13 May 13, researchers from the Xishuangbanna Tropical Botanical Garden (XTBG) of the Chinese Academy of Sciences revealed how two dominant pine species in Southwest China responded to the extreme drought of 2023. Their findings reveal that forest dieback is not uniform but is instead shaped by species-specific vulnerabilities and local environmental conditions. The study was conducted across 20 large forest plots (four hectares each) in Yunnan Province, a biodiversity hotspot that experienced an unprecedented eight-month drought between 2022 and 2023. The researchers used drone surveys, high-resolution satellite imagery, and environmental data to investigate a widespread dieback event affecting Pinus yunnanensis (Yunnan pine) and Pinus kesiya var. langbianensis (Simao pine). They systematically assessed the post-drought canopy mortality dynamics, water response trajectories, and recovery capacity of the two pine species. They also quantified the key drivers behind the spatial patterns of dieback. The results showed that the 2023 drought caused a sharp drop in the normalized difference water index (NDWI) for both species. However, their post-drought recovery paths diverged significantly. Areas of Yunnan pine dieback exhibited irreversible damage with no meaningful recovery. By contrast, Simao pine showed rapid but incomplete recovery, suggesting a lasting effect of the drought. Further analysis identified distinct constraints driving dieback in each species. For Yunnan pine, dieback was primarily driven by intrinsic stand traits, such as tree age, canopy height, and soil potassium levels. Older stands and those with nutrient imbalances were far more likely to collapse. For Simao pine, the dominant factor was topography, especially slope aspect and steepness. South-facing slopes, which receive more solar radiation and experience greater water loss, were disproportionately affected. The study generated spatially explicit risk maps, revealing that dieback hotspots are disproportionately located near the distributional margins of both species. Populations living at the edge of their physiological limits are most vulnerable to climate-driven extremes. “Our results provide new mechanistic insight into species-specific drought vulnerability. Effective adaptation strategies must move beyond generalized assessments toward species- and site-specific interventions. It is necessary to integrate multi-scale observations, such as unmanned aerial vehicle (UAV) and satellite data, to improve the accuracy of forest mortality predictions,” said FAN Zexin of XTBG.

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