FöRFATTARE
Lundmark, Robert

INSTITUTION
Industriell ekonomi och samhällsvetenskap / Samhällsvetenskap

SAMMANFATTNING
An applied partial equilibrium model of the forest cluster has been developed and implemented to assess the impact of changing market conditions for the sawmill industry in Sweden. The focus of this study was thus to analyse the sawmill industry and the interdependencies between the different sectors in the forest cluster. The dependencies and relationships between the sectors using forest-based raw materials implies that changing market conditions in one sector could have profound effects on the other sectors. In this research report the forest cluster is defined and a partial equilibrium model is developed and implemented (FCM) that simulates the results from changing market conditions for the sawmill industry and its effects on the other sectors in the forest cluster. Three scenarios are simulated using the FCM: (i) a ten percent decrease in demand for sawn wood products; (ii) a 30 percent decrease and; (iii) a ten percent increase. The results indicated that both production and consumption patterns are sensitive to changes in the demand for sawn wood products. There are also significant differences between different intermediate inputs and between different sectors in their responses to these changes. Also, certain sectors and inputs would gain market share while others would lose market shares. Changing output market conditions for the sawmill industry have significant effects on the factor prices and on the flow of intermediate inputs between the forest cluster sectors. In general, in the minor reduction and the worse case scenarios the price for sawlogs is reduced by between nine and 25 percent depending on scenario. Even a small reduction in the demand for sawn wood products has serious effects on the price formation and on the quantitative flows in the cluster. The factor prices for woodchips and sawdust increases by 21 and 34 percent, respectively, as a consequence of a 30 percent reduction in the demand for awn wood products while the price of sawlogs decrease by 25 percent. The reduced supply of the sawmill by-products, i.e., sawdust and woodchips, causes significant price increases forcing the woodboard industry to close down entirely. The forest value will, depending on scenario, decrease by as much as 5.5 billion SEK due to reductions in the demand for sawn wood products. The value of the forest is reduced since forest owners can not fully meet the reduced domestic demand by increasing export volumes. The difference between the sawlogs and pulpwood prices are diminishing considerately mainly as a result of a reduction in the demand for sawlogs from 160 SEK in the baseline scenario to only 51 SEK in the worst case scenario. This complicates the traditional classification between the two types of roundwood. What has traditionally been considered as sawlogs and primarily purchased by the sawmill industry are now close to being classified as “pulpwood” and can thus be diverted to the pulp and paper industry reinforcing the predicaments for the sawmill industry.

ISSN 1402-1528 / ISRN LTU-FR--06/20--SE / NR 2006:20