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Sweden to cut production in sawmills due to high energy prices and falling market

Sweden to cut production in sawmills due to high energy prices and falling market

Posted on October 10, 2022   |  

  • The recent increase of SEK 1/kWh in electricity prices is unsustainable for Sweden’s largest sawmill group, Vida, as the company will need to increase the cost by 10%, which is SEK 170 million on an annual basis.
  • In the short term, price hedging and production cuts will mitigate the cost shock but Vida will reduce production by 15%.
  • Electricity prices in both SE3 and SE4, central and southern Sweden, increased before the invasion of Ukraine which worsened during the war even more. 
  • The higher costs for electricity are putting pressure on the sawmills and also on manufacturers of other building materials as the cost of producing steel and concrete is also increasing.