Kevin Mason
Economic Outlook: Risks abound for 2026 and beyond but we see little chance of upside surprises for global GDP growth next year. Instead, we forecast modest declines in both US and Chinese GDP in 2026, with the Eurozone growth rate nudging up slightly from depressed levels. US-driven tariffs will stabilize but remain a drag and may become the norm for the next three years. As we’ve noted before, demand won’t be driving upside for the forest sector. Interest rate relief in the US continues to lag earlier expectations (with two further, 25bps cuts expected next year), and a US housing recovery will likely be pushed out to the second half of 2026 at the earliest (potentially 2027). A further weakening of the USD relative to other major currencies will create additional headwinds for US-based producers focused on exports but should also put downward pressure on US imports.
Forest Products Outlook: For most markets, the first half of 2026 will look a lot like 2025, with oversupply resulting in weak prices and lacklustre earnings. Highlights include:
- Housing starts will slip next year to 1.33MM as mortgage rates are expected to move only moderately lower. Affordability issues persist.
- Log prices should trend sideways, with some markets up and others down. Demand from China could rise as its US log ban has ended.
- Lumber prices will move up in 2026 as supply reductions related to high costs (duties, tariffs, etc.) begin to bite harder.
- Panel prices are likely to remain rather low in 2026 due to OSB (particularly) facing oversupply issues as a couple of mills ramp up.
- Pulp prices hinge on supply dynamics; the situation has changed as China has boosted its internal supply. Although prices are moving off their lows, shuts are needed to maintain upward momentum.
- Newsprint demand will drop by double digits next year, but, with some mills currently offline, prices should hold until supply restarts.
- Paper prices will be mixed, with expectations for an increase in uncoated woodfrees; most other grades should hold at/near year-end levels. The removal of tariffs would push prices lower.
- Containerboard producers are expected to drive a price hike in Q1 given the massive capacity shuts this year. Demand will remain sluggish, but rising box shipments aren’t needed to support hikes.
The negotiations that remade the North American Free Trade Agreement were, as one participant put it, a series of “near-death” experiences. …In the years since the U.S.M.C.A was signed, Mexico and Canada have become America’s top trading partners. Millions of jobs depend on this economic alliance, which exceeds $1.8 trillion in trade. …Last week, Trump suggested that he would exit the U.S.M.C.A.: “We’ll either let it expire or, well, maybe work out another deal with Mexico and Canada.” Some observers discount Trump’s bluster as mere gamesmanship. …He returned to the White House on a promise to create jobs and lower prices—to make the country “boom like we’ve never boomed before.” Instead, tariffs are fuelling inflation, and many experts believe that it is only a matter of time before the economy starts hemorrhaging jobs. …As in the previous round of negotiations, time does not appear to be on Trump’s side.
Plywood importer InterGlobal Forest, which is seeking a rehearing of its case challenging CBP’s finding that it evaded antidumping and countervailing duties on plywood from China, 
China’s pulp and paper sector is witnessing transformative growth with Huatai Group’s announcement of its monumental 16-billion-yuan investment in a fully integrated forest-pulp-paper project located in Yulin, Guangxi. 
KUCHING, Malasia — Chinese timber companies are struggling in their businesses due to insufficient orders for their products amid a weak global market. They have complained about poor demand in the timber market and intense competition in terms of product prices. Adding to their woes are rising raw material costs, according to the key challenges reported in the Global Timber Index-China Index report in November 2025. …To mitigate the challenges, Chinese enterprises suggested the need to expand into international markets to increase the volume of orders for their products, and called for government policy support for their operations. …Back home, China reported strong domestic retail sales of furniture, reaching 17.9 billion yuan in October, a 9.6 per cent increase from a year ago. …In a related development, China reported a robust export market for its particleboard, which surged by 67 per cent in volume.
The smell of an old book … escapes as a cover is eased open or a stiff page lifted, settling briefly in the air between hand and paper. In libraries and second-hand shops, it is a faint but persistent smell… It is often associated with comfort and habit, yet it has a material basis. Conservators and chemists treat it as evidence of physical change. Paper, ink, glue, and binding age continuously, releasing compounds that remain present long after printing. What is sensed is the slow chemistry of use and storage. …Paper accounts for much of the smell associated with old books. From the nineteenth century onwards, most paper was produced from wood pulp containing cellulose fires and lignin. Over time, these components undergo chemical change. Cellulose chains fracture and shorten. Lignin oxidises and breaks into smaller fragments. These processes release volatile organic compounds that drift from the page surface.
The EU Deforestation Rule has already caused supply chain hurdles for American farmers, ranchers and foresters, and the rule has not even begun being enforced. EU farmers themselves have raised concerns over their compliance requirements and received additional flexibilities, and member governments are still navigating how to implement the complex auditing system. With these logistical challenges clear even to EU officials, the European Commission has voted to once again delay the rule’s implementation until 2026 and 2027 for large and small businesses, respectively. However, as long as the rule stands as currently drafted, agricultural supply chains will be strained from the looming enforcement deadline. Overall, the EU fails to recognize the long-standing position of American farmers and ranchers as global leaders in agricultural production with environmental stewardship. A rule that was originally targeted to penalize bad actors in the global marketplace has now hindered some of the most productive producers in the world.
The intense green of spring cannot mask the dead trees in the Harz mountains. Standing upright across northern Germany, thousands of skeletal trunks mark the remnants of a once great spruce forest. Since 2018, the region has been ravaged by a bark beetle outbreak, made possible by successive droughts and heatwaves. …The loss has sparked a reckoning with the modern forestry methods pioneered by Germany that often rely on expanses of monoculture plantations. The ferocity of the beetle outbreak means there is no going back to the old way of doing things: replacing the dead spruce with saplings from the same species would probably guarantee catastrophe once again. Instead, foresters have been experimenting with a different approach: pockets of beech, firs and sycamore have been planted around the surviving spruce to make sure the returning forest is more biodiverse. 
Australia’s trees must contend with many lethal factors, from intense megafires to introduced diseases and invasive species. But beyond these specific pressures, new research indicates the underlying natural death rate of trees in major forests across the country is rising. This increase in tree deaths is due to higher average temperatures from climate change, according to a study 
IFA Farm Forestry Chair Padraig Stapleton has acknowledged the establishment of the Group Forest Certification Ireland Board as a positive development for the Irish forestry sector. This follows the inaugural meeting of the Board which was held this week. IFA Forestry Policy Executive Amy Mulchrone has been appointed as a member of the Board by Minister Michael Healy-Rae. “The establishment of the Group Forest Certification Ireland board is a positive initiative by the Minister. The increased focus on voluntary certification of privately-owned forests that this Board will now hopefully bring should significantly scale up the area certified. To date, only 8% are certified, substantially lower than Coillte plantations, which have dual certification from both the Forest Stewardship Council (FSC) and the Programme of Forest Certification (PEFC).”
Forestry leaders have warned Scotland will fail to meet its planting targets for yet another year amid concern investment is going elsewhere. Since annual targets for woodland expansion were set, the Scottish Government has missed the goal every year apart from 2018, when it was met for the first time. In recent years, planting rates have often fallen significantly short of the set targets, with the year from 2022 to 2023 seeing only 8,190 hectares of a 15,000 target planted. Jon Lambert, of Goldcrest Land & Forestry Group, an independent UK firm of chartered surveyors and foresters based in Edinburgh, warned the figures are down because of the lengthy and clunky grant application process. “The amount of planting in Scotland is way down than it should be,” said Mr Lambert.
Douglas-fir may prove to be a productive alternative to Sitka spruce for the UK’s commercial forestry sector. That is one of the early conclusions from ongoing research to test the suitability of 17 tree species as potential options for future timber production. Taking place across a network of nine large-scale experiments (in locations such as the Newcastleton, Cowal, and the Black Isle), the Forest Research-led investigation also found Douglas fir had the promise for further use in the south and east of the country, where the climate is forecast to become significantly hotter and drier than today. While already considered by many as a serious option, the species only makes up around 4 per cent of the UK’s total commercial forest.
The Arctic Energy Alliance and the Wood Pellet Association of Canada will co-host the Arctic Bioenergy Summit and Tour this January in Yellowknife—an emerging hub for northern renewable energy innovation. With the speaker roster nearly complete, Day 1 will set the tone with a deep dive into bioenergy’s role across Canada’s North, from evolving policy frameworks to community-led energy solutions. Sessions will explore regional strategies, technology developments, and bioenergy success stories, highlighting what’s working in remote and Indigenous communities and the lessons learned along the way. Speakers will also tackle supply-chain challenges, including logistics, fuel production and distribution, and the unique complexities of operating in northern climates. The program wraps up with a networking reception—an opportunity for delegates to connect, share insights, and build partnerships advancing sustainable energy in the Arctic and beyond.
Forest management has entered a phase defined by competing pressures. Fire risk is rising. Biomass residues are accumulating. Carbon accounting expectations are tightening. Pyrolysis has emerged as a technical lever capable of addressing these constraints simultaneously. Its value lies not in abstract sustainability claims, but in its operational and ecological consequences when integrated into forestry systems. Reducing Fuel Load and Wildfire IntensitymOne of the most immediate benefits of pyrolysis in forest management is fuel load reduction. Thinning operations, deadwood removal, and post-harvest residues generate large volumes of low-grade biomass. When left unmanaged, this material increases wildfire probability and severity. …When treated as an ancillary technology, pyrolysis underperforms. When embedded as a strategic tool, it amplifies the effectiveness of existing management practices. Pyrolysis contributes by connecting fuel reduction, carbon management, soil health, and economic viability within a single operational logic. 
Last year will be remembered as a real test of commitment for the global sustainability agenda. Political uncertainty and regulatory rollbacks, particularly the weakening of flagship EU legislation such as the Corporate Sustainability Reporting Directive and yet another delay in enforcing the European Union Deforestation Regulation, signal a troubling loss of resolve. These decisions reward inaction and deter the very ambition needed to secure long-term economic and environmental resilience. But the crisis of nature loss should not be left to the shifting winds of policy; it requires businesses to step forward and lead the way. As we enter 2026, a pivotal triple-COP year for climate, biodiversity and desertification, it’s time to look past the political noise. While compliance meets today’s requirements, only a deeper commitment to the environment can protect a business against the lasting costs of nature loss. 
