European sawn timber markets moved into February 2026 in a broadly cautious mood, with price stability across most grades and destinations masking a more anxious undercurrent driven by the eruption of the Iran conflict and its mounting consequences for global freight markets. The geopolitical shock arrived at an already delicate juncture for Nordic exporters navigating elevated log costs, sluggish European construction demand and the residual uncertainties of Storm Johannes.

Price movements in February were narrow. In Germany, spruce 44-50×150 mm edged down 0.77% against January’s midpoint, while spruce 50×100 mm moved in the opposite direction, rising 0.80% on a firmer lower limit; other German grades held flat. France showed quiet firmness, with spruce 44-50×150 mm nudging up 0.81% on a lifted lower limit; other French grades were unchanged. Benelux and the UK were the quietest markets, with all assessed grades flat across the board. The overall picture is one of a market in a holding pattern, with buyers managing inventories conservatively and no broad directional impulse in either direction.

The Middle East conflict: freight costs and the MENA shadow

The conflict in Iran has sent shockwaves through global shipping markets, with direct consequences for Nordic sawn timber exporters. As of mid-March, war surcharges on container shipments to the Middle East and North Africa had jumped by approximately $3,000 per container, about $60-plus per cubic meter, or around €55 per cubic meter, on a standard 40-foot container carrying 45-47 cubic metres of timber.

Against a baseline sea freight cost of approximately €50 per cubic meter, the surcharge effectively more than doubles the shipping component of the delivered price, which translates to a 20-25% increase in total cost that neither buyers nor sellers can readily absorb. Sources active in MENA markets described the surcharges as too high to pass on, with a significant number of shipments cancelled as a result.

The Middle East and North Africa had been among the more resilient demand destinations for Nordic exporters through an otherwise difficult 2025. Egypt alone was receiving an estimated €240 million worth of EU sawn softwood in the first half of 2025, and the broader MENA region had been projected to grow at a compound annual rate of around 9% through 2032, driven by Gulf infrastructure programmes and persistent North African housing deficits.

Major carriers including Maersk, MSC and Hapag-Lloyd have suspended Hormuz crossings until further notice, with vessels rerouted around the Cape of Good Hope, adding weeks to transit times and compounding cost pressures.

The Houthis, whose Red Sea campaign had only recently wound down following a ceasefire, had threatened to escalate again, which would layer additional disruption on top of the Hormuz closure.

The freight shock compounds existing cost pressures at the production level. Fastmarkets senior economist Dustin Jalbert flagged the compounding effect on logging operations. Surging diesel costs, especially in Central Europe, are adding to log procurement pressures that are already almost impossible to pass on downstream, according to Jalbert. Jalbert said a potential stagflationary effect on the broader European wood products complex, which is a scenario in which energy cost spikes hit pulp and paper operations, could threaten sawmill residual revenues when other income streams are under strain.

Producer conditions and competitive dynamics

Swedish sawmill operators continued to navigate a difficult margin environment in February, with persistently elevated sawlog costs pressing against flat or modestly declining sales prices in key markets. Sources noted that sawlog prices remain materially higher than sawn timber prices for both pine (redwood) and spruce (whitewood). The conditions that made the fourth quarter of 2025 exceptionally hard for Swedish producers had not materially improved at the start of the new year, though some participants expressed tentative hope that the first quarter of 2026 might mark a turning point. Some decrease in sawlog prices has become visible in recent procurement, which would offer modest relief if the trend holds.

The pine-spruce species imbalance that characterized late-2025 markets remained a live issue in February. Spruce continued to command a premium over pine in most markets, and while the possibility of substituting whitewood with redwood has been discussed, sources indicated that uptake in key European markets remains limited. Planing mills are effectively unable to use pine as a substitute; in construction timber applications such as KVH and lamellas, pine can work for some products, but tradition and client expectations–including the expectation that redwood be priced lower than whitewood–continue to inhibit broader switching, even in non-visible applications.
Second quarter negotiations are ongoing and sources told Fastmarkets that the market appears to be moving after an extended period of stasis.

Production curtailments in Sweden and among other Nordic producers dampened their appetite to push hard in January-February, with a degree of mutual wait-and-see evident as participants watched moves of larger players closely, before committing to their own moves.

In the Dutch market, particularly on SLS (Scandinavian Lumber Standard) in broader sizes and long lengths, conditions were described as tight.

Certification continued to attract commercial attention: PEFC remains acceptable for the majority of buyers, but some major clients, particularly in the Benelux region, are requiring FSC in response to governmental procurement requirements.

Market outlook

The outlook for March and the broader first half of 2026 is materially more uncertain than it appeared at the start of February, principally because of the freight cost shock generated by the Middle East conflict. European construction demand continues to offer few positive signals, with residential building remaining the principal brake across all major destination markets and renovation and non-residential segments providing only partial offset. Some Nordic producers said they were counting on MENA demand to help absorb production volumes; the degree to which that outlet remains viable will depend on how quickly or slowly the geopolitical situation resolves.

For the European destination markets assessed in this pilot, sources indicated that the immediate implication is continued price stability underpinned by cautious buyer positioning rather than any fundamental improvement in end-use demand. Sources continue to monitor whether the hesitant optimism around a first quarter inflection point will survive contact with the freight and geopolitical risks weighing on the sector.