The new conflict in the Middle East is having repercussions on Sweden’s sawmills, according to Setra Group’s Olle Berg.
Mr Berg, Setra EVP market & business development, described the impact of the Iran war during a webinar organised by Timber Exchange on how the Iran conflict is reshaping the global sawmilling industry.
Webinar discussions, which also included Gregor Triltsch from Pfeifer Group, focused on cost pressures, shifting logistics routes, and changing raw‑material flows in an increasingly uncertain environment.
Mr Berg said the conflict has consequences in both the short and long term — and they create further cost increases for an already squeezed industry.
He said the high oil price is quickly reflected in increased shipping costs globally, with more expensive bunker prices affecting all transports, regardless of destination. At the same time, sharply increased risk premiums on container traffic and general uncertainty in the region mean that direct deliveries to the Middle East are expected to decrease significantly, due to excessively high container prices, bunker and risk surcharges, and the risk that goods will not reach their final destination if the war escalates.
“For Swedish sawmills, the volumes to the area are relatively small — but not insignificant,” said Mr Berg. “The reduction means that alternative markets and products need to be identified, especially for thicker timber classes in pine.
“In the longer term, the consequences are more difficult to predict. The impact of the conflict on inflation, interest rates and the global economy is still unclear, but one thing is clear: a protracted conflict risks dampening the world economy and thus the global construction market, which could delay a recovery in the current economic situation.”
Mr Berg said the rising energy and fuel costs will be difficult for the sawmills to bear.
He warned that cost increases throughout the value chain must be taken into account.
“This requires flexibility, rapid adaptability and a continued strong presence in several markets. For Setra, this means that we continue to work closely with our customers, follow developments closely and ensure that our products find the right way out into the world — even when the world around us is shaking.”
