Good morning, everybody, and welcome to the interim report presentation for Holmen. It's myself, Henrik, and Anders who will take you through the presentation. We do as we always do, we take your questions after the presentation. Let's begin. We are really happy to be able to show a result for the third quarter, which is on record levels again, not reaching up to exactly where we were in the second quarter, but that was totally outstanding. We have followed market pricing, meaning we have good pricing power, and we've also been able to control the cost situation. We'll come back to that. It's a lot of hard work when it comes to handling the energy situation in most of our business areas, which we will come back to a bit later in the presentation. Good profit level also means strong cash flow.
Strong cash flow, in our case, means also that we have a really low net debt currently. Let's move on to forest and our different divisions. I will start with a slightly different slide this time, just to remind you, we are, as you know, a company where the forest is in the center of everything we do. We have also done it in actually a really good way during the years. We plant trees with a perspective of 80-100 years. If you just look at what we have been able to accomplish the last, say, 50, 70 years, we have more wood standing in a forest than ever before, twice as much as after the Second World War. At the same time that we have over time been able to increase the harvest.
We have also, as one of few countries in the world, been able to reach a biodiversity index status, which is, let's call it a good status. It's us, it's Finland, and it's Canada, and the rest of the countries aren't simply not there. If you look at Sweden, it's also interesting to see, you can't see it on this slide, but we have improved a lot the last 30, 40 years. Moving on to the current market situation in the wood market. We have talked a lot about tough competition for sawlogs the last year at least. Things are changing, as you know. When it comes to the sawmills, the activity is a bit lower, but when it comes to pulpwood, competition is increasing. Partly because there is not coming any wood anymore from Russia. The pulp mills are still running full.
It means also that less wood, mills running full, more competition, and also when it comes to the energy situation, there is an interest for also burning the wood as prices are currently. Prices are ticking up, Anders. That normally means that we should make a little bit more money in the forest.
Yes, Henrik. The third quarter represent a quite normal quarter, around SEK 350 million is a normal profit level in today's market environment. We have prices that are year-over-year 15% higher. We have some higher costs as well, but prices, we have established a new profit level in the forest division reflecting the current market conditions. When it comes to asset values, Henrik, we can take the next slide. You know, all know that our forests are booked at the value or a transaction based on transaction prices in the areas of Sweden where we own forests. We update that annually in the fourth quarter. We'll do it in the fourth quarter of this year.
The graph we have included in this presentation includes one of the sources that we use and their pricing up to this summer, which indicates that forest prices are still or have been rising this year. It indicates that the forest value will increase when we close the books for the year. Back to you, Henrik.
Thank you. A few words about Paperboard. Also here, we have been able to successively, stepwise increase prices. It's a market which has been well, demand has been rather good the last couple of years. A bit of a change if we look back a number of years back, but it has been good. What we have seen lately when it comes to pricing is quite obvious. After many years with hardly any change in price, we are now seeing that price have ticked up quite a lot, mainly driven by cost pressure from below energy and fiber. In our case, we have good order books. We see in the general market that the order backlog is coming down a bit, but so far for us, it looks fine. We're also, Anders, we are self-sufficient in energy.
Not only self-sufficient, we actually have some extra electricity to sell, which has helped the result, I guess.
Indeed, Henrik. We have been able to raise prices, as Henrik mentioned. They are 6% higher this quarter than the previous quarter. We have established a higher level for Paperboard, 15% higher than a year ago. Cost for chemicals and pulpwood have risen. Chemicals are 50% more expensive than a year ago, and pulpwood 20% more expensive. This has been balanced by us not using any energy. We're not buying energy from external sources. We're self-sufficient in Sweden, and we actually have excess power available to sell to the grid in the U.K., which taken together has contained cost inflation. We have the same cost situation net-net when taking into account that we are able to sell electricity in the U.K. at very nice prices. That did help the third quarter result in a good way.
Moving on to something where we actually consume a lot of electricity, there is no excess capacity here. In Paper, we have seen for quite some time that the market is in structural decline, different from segment to segment. Where we are, we are really big in Book Paper, for example. It's a different development, but overall, of course, we are part of the P aper segment as such. Also here, it's been a lot of cost pressure from beneath, especially coming from recycled fibers and the energy situation we have in continental Europe. That has meant that prices have been pushed up, even though players in the market today, in total, do not run full. Given the cost situation, market prices have come up quite a lot.
If you look at statistics just the last few days, you can see that recycled fiber prices are coming down a bit, but the gap between old corrugated case material, OCC, and the fibers being used to produce printing paper competing with us in this segment, the gap is bigger than ever. It's not easy to know exactly where it's going, but that gap is extremely important for us to understand as we go forward, as it is part of our cost competitiveness over continental Europe. Anders, we have worked really, really hard to find out how to handle the situation 'cause electricity prices in Sweden have also been high. We have been able to have good control over the cost and also come out in, I would say, a really good way. Can you explain a bit what we have done?
I'm not sure I can fully explain it, but I can try. What we have done is that we have taken production stops, which of course have decreased our production volumes, but we have been able to time them both in the second and third quarter in a very good manner towards times when prices have been extremely high on the market. We have taken downtime. We have also been able to adjust it between day and nighttime. Storage capacity has been expanded, and we have been able to do that without sacrificing customer satisfaction. The magnitude of the savings we have made on the electricity side is roughly SEK 200 million per quarter, the third and second quarter, by being able to time our production stops in this manner.
Looking at the third quarter, it was another quarter with a super profit. We benefited from seasonally low costs, and we did not have any maintenance stops in the third quarter. That added to our ability to be flexible in production and time towards high electricity prices. We will have a number of maintenance stops in the fourth quarter, which will cost some money, but it will foremost limit our ability to time our production stops to when electricity prices are high. We will not really have the same flexibility in the fourth quarter as we have had in the third and second quarter
I think.
Henrik.
Thank you. Moving on to wood products, where we have seen fantastic results the last number of quarters actually. Things are changing, and they have changed during the third quarter, meaning that most of our customers are in, let's call it a waiting mode. Inventories are being taken down, and simply 'cause there's a lot of question marks when it comes to the construction activity in general and where is the building and housing, etc. , going. In our case, well, we follow the market, and if you look at the U.S. price and the European price, right now prices are roughly on the same level when you compare net mill at home. If you look at where we are today compared to last quarter, well, we are on a slightly lower level.
Exactly where this will go and where it will turn, it's impossible to say. We do not only think about the future in terms of next week or next month. We still believe this is a very interesting area for Holmen. Sooner or later, I'm sure we will come back to a situation where long-term building in wood will be seen as something really, really good, not only for the environment, but also in general. When all products will have to carry their true climate cost, building in wood, I am quite sure, will come out as a winner. There's also another thing to think about when it comes to how can you expand, what can you do, and its availability of raw material.
We talked about it in the beginning when we talked about the current market in the forest or the wood market, and we talked about pulpwood now. It's fierce competition. When it comes to sawlogs and where it should come from, well, there are a number of regions where normally there is a lot of access to raw material. Take Canada, it's not given anymore, the situation in western Canada. Russia, no need to be explained any further. Good places for sure is Sweden and Finland. Then, I think we also have to add that there's a lot of activity in U.S. South, where there is a lot of growth and, probably potential also to build some or to support more building in wood in the future. Lower prices, I mentioned, Anders. Has it taken a Do we see any significant change in the result? Yes, we do.
Yes, that's quite simple to see. The result is down a lot compared to previous quarter. Prices are down a bit more than 20%. Deliveries are slow, 25% lower than the previous quarter. Normally, we have taken downtime due to vacation period, so our inventory levels have not really increased that much. They have increased somewhat, but not that much in the quarter. Of course, if you have this kind of price and delivery development, the result follows. It's still at a decent level compared to history. The return on capital is still decent, but as Henrik mentioned, prices are still on the way down.
Yeah. Let's move on to renewable energy. We said before that we are happy to increase our activity in this area and expand. We have lately increased production of renewable energy by Nottjärn, Blåbergsliden Wind Farm, and also Varsvik. We are also looking at the market as such with, I wouldn't say some concern, but it's clearly so that we produce a lot of energy up north where prices are lower or they are locked in simply because transmission capacity to let electrons floating free in the country is simply not there fully. We are also a company where we consume a lot of electricity in the south.
We think a lot about energy, we discuss energy, and we work extremely hard to find ways to both have a good cost position, but also to understand how to increase our own production and develop the company over time. There is not only price that determines exactly what you earn. There's also new ways of making sure that you can help the system to the grid to be stabilized. I think maybe you can mention that as well, Anders, when we take the profit first.
Of course. It's a nice profit for the third quarter. It would have been much bigger, as you understand, if we would have been located without grid limitations. But it's a good, decent pricing where the hydropower's flexibility adds nicely, and we actually do see a good contribution from the wind, especially the wind farm we have close to Stockholm. If we take the next slide, this is an illustration of how much hydropower earns on top of the average electricity price in the region they are located. It has increased quite a lot over the last 18 months. Part of it is our ability to time production and store. For example, during Q3, we stored water as much as we could from July to September, where you had quite a big price difference.
Actually, the main contributor to this increase now is that we add stability to the system. We help the grid operator to keep the frequency in the grid at 50.0 hertz, and that is quite a lot of revenues that we get from providing that service to society. Added service from running hydropower is up at SEK 170. If you include both the timing and the support services, as we call them, per MWh, SEK 170 per MWh, up from maybe SEK 30- SEK 40 a year and a half ago.
Thank you. I've said many times we haven't seen the real value of hydropower, and it will be more and more discussed, I think, in the future with more especially wind power and also solar perhaps in the system. That's about the different business areas. Just a reminder what kind of a company we are and our business model. It works absolutely fine also in times of energy crisis to have the target far away when it comes to growing wood, but also to make sure that we make the best out of everything that comes out of the forest, and being able to actually contribute to the climate change we desperately need to actually do, even though it's a bit tough at the moment. All right.
We are happy to take on any questions you have.
Ladies and gentlemen, anyone who has a question may press star and one at this time. The first question comes from Harri Taittonen from Nordea.
Yes, good morning. Well, could we start from the wood market or drill on this one? There's lots of questions, of course, on a good result, but what's your best feel of the inventories? I mean, with this sort of rate, I mean, and with the absence of imports from Russia and all that, how much could that sort of mean on the supply-demand or the sort of speed of correction in inventories? I know that it's quite speculative at this point, but can you add color on this, please?
A year ago, we did have a correction of the inventory levels. It took 4-5 months for it to work its way through the supply chains. This time it's maybe a bit different. Now everybody wonders what will happen to the construction activity. It's partly a destocking exercise, but it's very much a wait and see mood what will happen to the construction cycle.
I think the big difference is, as Anders says, it's the outlook for the future.
Sure. Yeah, yeah, exactly.
Near term at least.
Yes, and you mentioned about the time when construction industry will be carrying the true climate costs. I mean, do you see? Are there any kind of points, data points there on that you are looking or dates that you are looking in this regard?
You have specific events like if EU introduce CBAM, that is a step where you actually are forced by legislation to take a higher cost. You have the reduction of free carbon dioxide allocation to concrete industry and steel for that. That will happen, but the bigger force is probably that the buyers of the houses put a much more stringent requirement on or demand on green housing, and that is probably a fast track towards in favor of wood.
Just final question on energy, if I may. Of course, if one calculates the average sales price based on the sort of deliveries and revenue, it doesn't give the full impact or the fair picture of the real average price change. I mean, can you give some color on what the sort of like for like price change was and how much export will if this was driven by exposure to the spot market? Because obviously the majority of the sales will be hedged. Some color on that would be good. Thanks.
[Försäkra]. Did we talk? I missed the first part of your question.
Yeah.
Talking electricity now?
Yes.
Yes.
Talking electricity and exactly that understanding that you had extra revenue from hydro and all that.
Okay.
Basically if you could kind of just give color on how much the, sort of, the sales price increased and how much that was because of the spot market exposure.
In hydro, we are fully spot exposed. You can look at the graph that we have provided, and you see the added benefit on top of the spot prices. It's predom-
Okay.
90% is SE2, so that's the market you can look at.
Exactly. Okay. Thank you very much.
Thank you.
The next question comes from Martin Melbye from ABG Sundal Collier. Please go ahead.
Yes, good morning. Could you give an indication of the price change into Q4? You have announced 10% on carton board, and RISI has newsprint and magazine prices moving up 10%. What do you reckon on the sawmills as well?
When it comes to Paperboard and Paper, yeah, there are rumors, there are discussions about new prices, but we have to wait and see what happens. Also there, I think you also have to look at how the cost is developing and also what governments are doing, subsidizing the industry, et cetera. It can have an impact. It's not easy to say what will happen. We see what we have done and that we have had higher prices, which is earlier price increases, of course. What will happen is difficult to say.
We can add that normally in Paperboard it takes a very, very long time to implement the price increase. The step up in prices that we have had year-over-year is very unusual that it goes so swiftly, and it's based on cost, the cost pressure we have in the whole industry. Normally it takes a lot longer time for Paperboard price increases to filter through.
Wood products. Even more difficult, I would say, to predict what's going to happen. I think we see right now that prices are a bit lower today than they were a couple of months ago, but where they will go, when it will turn, that, we do not guide about.
Say on the contracted part of the Paperboard, how much was repriced in this quarter and what is remaining for Q4?
We don't have any contracts remaining for Q4. We don't have any repricing of long-term contracts in this, the fourth quarter.
Okay. You gave this SEK 200 million of flexibility. Was that both for Paper and Paperb oard or only Paper?
That's only Paper that we have saved compared to a normal pattern of running the machines.
Thank you. Last question, this power sale in the U.K., how much was that roughly?
We haven't given a figure on it, but it's a good number.
Thank you.
The next question comes from Robin Santavirta from Carnegie. Please go ahead.
Yes, good morning, everybody. Thank you for taking my questions. Now, first I have a question related to pulpwood and perhaps sort of could you share your views on the availability outlook now going into the winter and the price outlook for both you and then when it comes to availability sort of maybe a bit broader in Scandinavia or in Sweden, what do you expect going into this winter and perhaps next spring. When will this sort of tightness peak? Is it now or is it next year? What are your views?
Can you predict exactly when the war will end? No, it's a good question, but it's a difficult question to answer. We do see that it has quite an impact when it comes to availability right now. To start with our own company, we have a lot of our own forest, and we also have a very good, strong organization, making sure that we are well-supplied. Right now, prices are ticking up a bit. If you are in a situation where you cannot supply from, say, regionally, you have to take imports to feed your machines, then of course you have a different cost. Today especially what you see in Sweden is that short fiber birch, obviously as that is mainly what's coming from Russia or used to come from Russia, there you see the biggest scarcity.
Anything you would like to add?
It's a market that is still in tightening mode, I would say. It's not getting easier day by day in this market. We are quite well-supplied, and as Henrik said, our strong sourcing organization is at these kind of times, it's where they come to its best use.
Mm.
Right. You say tightening modes or then I guess we should expect a bit more pricing to higher cost for pulp would go forward, at least to some extent, basically not peak yet.
It's difficult to get hold of pulpwood. It's a challenge. Right now it doesn't seem to. If you increase price, you don't get more. It's more of a challenge getting a hold of the raw material.
It's also a challenge as the demand for sawlogs is coming down a bit at the same time as demand for pulpwood is going up. That is not the perfect match, so makes it a bit more difficult. I
I understand. Thank you. Then you commented about Paper and also Paperboard sort of order book or order intake and demand softening a bit. Could you just sort of provide some color on the magnitude of that?
I guess you said you gave sort of a view of the operating rate in Paper in Europe when you reported Q2. I guess you said around 75%. Is this still sort of intact or is it even weaker now? What are you seeing in Paperboard order intake?
If you take Paperboard, first of all, if you look at the general statistics which is available, you can see that the order backlog is coming down a bit. If you take our niche, our company, and the way we are positioned, we have still a good order book, a good order situation. We also have, as we see it, good availabilities to, if needed, slightly change something when it comes to which segments we sell, if needed, in order to be able to run full. We believe also in the future. Remember that we are up in the right-hand corner when it comes to our business in Paperboard. When it comes to Paper, it's a theoretical calculation you can do and come out with a figure. What is the operating rate for the moment?
That's not easy, 'cause you will most probably see that there has been closures in the market, there has been machines that will be converted, and a lot of discussions still about machines being converted. Something has to happen on the supply side long term, that's quite clear. Normally, you need at least, say, 80% or a bit more to be able to run the paper machines in a good way. In our case, during the last quarter, we've been able to increase our market share. We have also increased our market shares in segments where it makes sense for us. We have moved some volumes from overseas to Europe, and we have increased, especially in our most interesting segment, which is Book Paper. For us, it looks okay. It looks actually quite good.
At the same time, you have to remember, we discuss energy a lot. It's not of our interest to run 100% flat out. We need some flexibility in order to be able to have the chance to produce a bit more when the electricity is cheaper and actually take some downtime when it's too expensive. We have learned a lot during the last quarters how to run it in that way. Operating rates are interesting, but for us, it's the combination of operating rates and doing the right things when it comes to electricity market that really pays off. We will continue to work in that way.
I understand. A final question, just when I look at the Paper division, I can see your sort of cost per ton is almost the same as you have, you know, average, say, past two years is up a couple of percent. But we do have higher chemical cost, we do have higher transportation cost, and wood raw material as as well. What explains that your costs are not going up in the Paper?
It's magic, isn't it?
It is almost magic, Robin. No, it's our way we run the mills.
During this year, at least the last two quarters, we have been very successful in taking downtime when the electricity price is very, very high. That explains how we as a company can manage our cost base in such a good manner.
Can I ask you, have you sold some of your secured energy on the balance?
No, market?
No, but this is how we time our production and our hedges are financial. If we don't consume in an hour where the price is very high, of course, we are enjoying benefit of our hedging.
Is that part of the earnings in the quarter?
Yes. Our whole energy bill includes all the hedges we have made.
Yeah. All right. Thank you very much, guys. Thank you.
Thank you.
As a reminder, if you wish to raise a further question, please press star and one on your telephone. The next question comes from Linus Larsson from SEB. Please go ahead.
Thank you very much. If I may, I'll continue on Paper. We come from a pretty extreme market environment with acute paper shortage in Europe. I wonder if you can give us some more color on the current market situation and outlook for maintaining or, if I understood you right, even increasing prices from here. We see, if I understand you right, quite a negative demand development. Natural gas prices are coming off. I mean, when you say operating rates remain low, I mean, aren't we starting to see good reasons for why paper prices should go as we have had in Q3. ?
You have almost answered all the questions you asked, Linus. Nah. You're absolutely right when it comes to the market. Yes, we see structural decline. Cost has been the main driver behind price increases of Paper. It's absolutely so. You are also right when it comes to right now we see slightly lower recycled fiber prices and gas prices for the moment is a bit lower. Remember, again, if you just look at first quarter next year and predicted gas prices, we see something totally different. If you look at state subsidies in Germany, for example, with a price cap, that's for 70% of the production. How will that influence? Well, it's not 100%. I think there will be a lot of changes in the market.
Very difficult to predict exactly what's going to happen, but I have a strong feeling that our position is not bad based on local wood, which we have good control over. We have to keep to, call it magic almost, to work with our electricity prices long term, of course.
When it comes to our business, we have very strong deliveries out. We have increased a lot of our deliveries to Europe. We have taken quite a lot of market share. We have taken downtime on deliveries, not sending anything outside of Europe. We are in a very strong position. What the market will do as a whole, it's it. Yeah.
It's more difficult than normal to predict.
It will be cost-driven.
Mm.
Right. I mean, the magic that you speak of in the second as well as in the third quarter, and I understand it might not be repeated quite in the same way in the fourth quarter, but beyond that, in kind of a gradually normalizing environment, will you be able to operate at this, you know, with this kind of improved excellence?
Depends on how volatile energy prices will be in the future. We don't really know how long this very volatile situation will prevail. As long as it's volatile, we will be able to benefit from it.
Mm.
Remember, it's also relative game, Linus, between us and continental Europe.
Absolutely. Just, you made these remarks about the fourth quarter and the impact of the stop. Could you please quantify that? What are the direct and indirect implications on Paper in the fourth quarter?
It's easier to quantify the direct effects. The maintenance stops, we have clustered them in fourth quarter. Didn't have any maintenance stop in the third. It's direct cost of some SEK 50 million related to the maintenance cost. The indirect effects of us not being able to time the stops, we can't know because we don't know the electricity price when we will stop. We will not be able to time, and we will be more limited in our ability to take downtime the other days of the quarter.
How many days of stoppage do you have?
It doesn't make sense to go into that detail, but it will limit our ability to take downtime when prices are high.
Maybe I should mention the cost for the Q4 stop in Paperboard as well as we talk about.
You all know about the estimated cost of the stop in Iggesund. The Paperboard mill is SEK 180 million.
Great. Thank you.
I can comment also that it is a higher number now for the stop in Iggesund. It's because we earn more money when we're running. It's not that we're making more expensive stops.
It's positive.
Yeah. In a way.
In a way, yes.
The next question comes from Oskar Lindström from Danske Bank. Please go ahead.
Yes. Good morning to both of you. Three questions from my side. Just the first one is to make sure that I understood this correctly. You're not selling any of your electricity hedges in the Paper division when you run production lower. Is that correct?
No. That is correct.
Okay. Super good. Second question is on capital allocation. I mean, as you point out, you have very strong cash flow and a strong balance sheet. You know, where do you see attractive opportunities to allocate capital, in the near future?
I think if you look back what we have done the last, say, five years at least, we like all of our assets. We continue to invest in Paper and Paper board as well, but we have invested quite a lot in expanding our wood products business and also our renewable energy. Sometimes we are limited by political decisions or veto, etc. , but the direction is there to give you some kind of guidance.
Okay. In terms of, I mean, energy, we know that you're trying to grow your wind power footprint, but that takes time. On the wood product side, are the opportunities more in sort of growing your existing assets, or are you missing sort of pieces of a puzzle that would make sense for you to acquire or even build greenfield? How should we think there?
We do have around five sawmills. At all of these sawmills, we have ability to grow organically. That's one of the nice features with wood products. It's you can stepwise grow that business. We're just right now undertaking quite a big investment program at our Iggesund sawmill, which will both enable a growth in volume, but also, moving into direction with more value-added construction products at that mill. I think we have an ability to grow by 4% or 5% per year just organically by investing in our sawmills. The key thing here is that you have to have control over the raw material if you're going to be able to grow.
Extremely important, Oskar.
That's more challenging than to invest in machinery.
Yes. That's actually a nice segue into my third question, which is on wood fiber shortage in Sweden, or tighter market as you're highlighting. It's my impression that, I mean, this is structural and that, you know, imports are getting more important and will be more important in the future. I mean, if you agree with that, do you see any opportunities to increase you know, to make investments to increase either intra-Swedish logistics of wood? I mean, you've talked about that in the past, a couple of years ago. Even sort of investing in you know, terminals or port facilities in order for you to be able to be more flexible in wood sourcing.
We are doing that all the time. It goes under the radar. We have implemented train systems. We actually this quarter bought a terminal up north and we're investing in terminals at both our Paper and Board all the mills to be able to more efficiently move logs both to our mills and from our forest in different directions. You're onto something important, Oskar. We work quite a lot on our ability to move logs within Sweden.
I suppose these are sort of train terminals or for trucks. Are you also investing in sort of harbor facilities? Is that something that could be interesting in the future?
We have access to harbor facilities that are suitable for our purposes. What we have upped our game at is being able to move logs by rail, and then you need terminals both at the mills and out at.
In the forest.
Out in the forest at good places. We have invested money in recent year and years to achieve that.
All right. Thank you.
The next question comes from Cole Hathorn from Jefferies. Please go ahead.
Morning. Thanks for taking my question. Just following up on the wood market. Is there any color you can give around where the higher cost producers are at the moment in the wood products market? I mean, if I think about the Canadian players, I've always kind of thought about them as SEK 500 per board foot, and we're really seeing downtime there from the commercial side. Love to understand where you see the higher cost producers in maybe Central Eastern Europe, where there's also some saw log availability issues. Thank you.
I think you're absolutely right. You mentioned the West Coast of Canada specifically, where we have seen that they tend to stop producing when prices come down too much and they have a higher cost simply. Also, the basic problem, of course, is the infestation problem with beetles, and you have the trees standing now a bit too far away, and you have environmental aspects, et c., that makes it more difficult to run sawmill operations there. I also mentioned place where you can increase, that's U.S. South. When it comes to Europe, we are trying to figure out also what will be the future sustainable harvesting level in continental Europe. We aren't really there yet, I think, to understand where it is.
Most probably it's a bit lower than what we have seen the last few years. Also that's driven by bark beetle infestation.
Just following up on effectively the pulpwood costs that we're seeing in the market. I mean, you've called out availability of pulpwood from lower harvesting of saw logs and, you know, less imports from Russia.
Mm-hmm.
Is there any color you can give on, you know, what would be a good example of, you know, maybe the upside case for availability as we go through into next year and a downside case? Am I right thinking that the downside case would be continued struggling sawmill markets, so less harvesting and potentially a warm winter so that you're able to harvest less on your forest land on the downside?
You also have the energy situation. If right now it's cheaper to burn wood than gas, and that comes into play short term on this one. It's a squeeze from a lot of angles right now.
Mm-hmm.
The upside is of a warm winter. Yeah, that could create difficulties in harvesting, but it would ease the energy situation in Europe and ease the competition a bit on pulpwood.
We have talked so much about burning wood, but of course, there's a lot of people thinking about it if you compare cost for different raw materials. It's not practically possible to do everywhere, but I think you will see some of it.
Thank you.
Next question comes from Christian Kopfer from Handelsbanken. Please go ahead.
Yeah, thanks. Good morning. Just a few follow-ups from my side. Apologize if you have already answered it. I have other conference calls running in parallel here. Firstly on Paper, what I think, Henrik, you mentioned that there are rumors the prices are still going up for the next quarter as well. As I understood it, Holmen have officially raised prices for both solid bleached board and folding boxboard here in the fourth quarter.
We can.
In that case, it should not be rumors, right?
There's always discussions on the price lists. As I mentioned, the Paperboard market is a slow-moving market. The prices hadn't moved for seven or eight or nine years before the rapid moves we have seen the last year. Now, maybe we are in a phase where we now have a traditional discussion on the price lists.
Oh, okay. Thanks. Thanks for that. Also I think you mentioned initially that you didn't expect that you had the same magnitude of excess sales of electricity in the fourth quarter. Sorry if I misunderstood it, but just to get some clarity there, how the impact perhaps could be on that factor in the fourth quarter.
I know. It relates, we talk Paper and with that we will have maintenance shutdowns in Q4 in Paper, which will take away production capacity, and that limits our ability to stop.
When the electricity price is high in Sweden. That's a reason that we will not have that, the same kind of flexibility as we have had in Q3.
Right.
Obviously, is it possible to just mention, I mean, what kind of amounts are we talking about?
No, we can't. Because we don't know. What we have said is that we saved SEK 200 million in Q3 and Q2 by this very flexible production strategy.
Right. Finally from me on wood products that you're really seeing timber prices coming down or saw logs coming down. Have you started to see that in your own accounts on the wood product division, or is that yet to come?
Log prices are not coming down yet.
It's too early.
It has come down in the market, yeah? That should reflect wood product division going forward.
No, the log prices are stable, I would say.
Stable price. Oh, okay. Sorry about that. Okay. Thank you very much.
Remember, you normally have inventory for a number of months, so it doesn't.
Yeah.
You don't see a price change that quick for the raw material.
All right. Do we have any further questions?
There are no more questions at this time.
Okay. Thank you for your interest and all good questions. I hope some answers also clarifying, and hope to see you soon again. Thank you very much. Have a nice day.