As we move through 2025, the global plywood and wood market remains in flux—oscillating between unpredictable price spikes, disrupted supply chains, and tightening sustainability regulations. For procurement professionals, construction firms, furniture manufacturers, and retailers, managing this volatility isn’t just about cost—it’s about long-term adaptability. Explore the 2025 global wood and plywood market landscape. Learn how supply chain disruptions, sustainability shifts, and pricing volatility are shaping procurement.
From North America’s sawmill labor shortages to Southeast Asia’s tightening export restrictions and Europe’s new environmental mandates, the industry is experiencing a convergence of economic, environmental, and political pressures. These forces are reshaping how we source, price, and plan for wood and plywood products across sectors.
This blog dives deep into the 2025 market outlook for plywood and lumber, highlighting key price drivers, global trends, supply chain challenges, and regulatory impacts. We’ll explore real market data and examine what it all means for sourcing strategy. Finally, we’ll conclude with a strategic perspective from procurement leader Mattias Knutsson, who offers practical insights on building resilient wood supply strategies in the face of ongoing global shifts.
A Look Back: How We Got Here
The plywood and lumber industries have always been cyclical—but recent years have been particularly turbulent:
- 2020–2021: COVID-19 shutdowns and housing booms led to unprecedented price surges. Lumber futures peaked at over $1,700 per 1,000 board feet in May 2021.
- 2022: Prices normalized briefly, but labor shortages and high inflation kept markets tight.
- 2023–2024: Demand from construction cooled slightly, but sustainability regulations and geopolitical tensions began squeezing supply again.
Now in 2025, prices are on the rise once more, and many regions are experiencing chronic shortages or logistical disruptions.
Global Market Snapshot: Wood and Plywood in Numbers
Here’s a high-level look at where the wood industry stands today:
| Region | Current Avg. Plywood Price (Q2 2025) | YoY Change | Key Market Forces |
|---|---|---|---|
| United States | $725/1000 sqft | +9.6% | Wildfire risks, union strikes |
| Canada | $680/1000 sqft | +6.2% | Transport bottlenecks, mill closures |
| EU (avg) | €690/1000 sqm | +8.1% | Sustainability regulations, slow reforestation |
| Southeast Asia | $540/1000 sqft | +12.4% | Export quotas, fuel cost inflation |
| Brazil | $495/1000 sqft | +15.0% | Political instability, port delays |
Global plywood demand is expected to reach over 215 million cubic meters by end of 2025, a 5.3% increase YoY.
Key Drivers of Volatility in 2025
1. Climate Disruption and Natural Disasters
- Wildfires in the western U.S. and Canada have reduced usable timberland by nearly 9 million acres since 2022.
- Reforestation efforts are slow, with tree maturity timelines (15–30 years) unable to keep pace with depletion.
2. Regulatory Shifts and Environmental Standards
- The EU Deforestation Regulation (EUDR), fully enforced in 2025, requires traceability for all wood imports, slowing trade with uncertified exporters.
- New FSC and PEFC mandates are driving increased certification costs, passed onto consumers.
3. Labor and Logistics
- Sawmill automation is up, but skilled labor shortages persist.
- Freight rates for wood container shipping rose 11.3% in Q1 2025 (source: Baltic Dry Index).
- Many ports are experiencing congestion due to rerouted shipping from the Red Sea and South China Sea conflicts.
4. Sustainability and Circular Design Demands
- Demand for carbon-negative or reclaimed wood products is surging—especially in Europe and the U.S.
- Recycled timber and engineered wood alternatives (CLT, LVL) are seeing double-digit growth in commercial construction.
Plywood Product Spotlight: What’s in Demand?
| Grade | Use Case | Trend 2025 |
|---|---|---|
| A-grade | Cabinetry, furniture | High demand from luxury segment |
| C/D-grade | Roofing, underlayment | Stable demand; price sensitive |
| Marine Ply | Outdoor, high-humidity construction | Growth in coastal and green building |
Engineered Wood on the Rise:
- Cross-Laminated Timber (CLT) usage up 18% in new builds (source: WoodWorks).
- Oriented Strand Board (OSB) remains a cost-effective alternative but faces resin cost volatility.
Supply Chain Strategies for Procurement Leaders
To navigate this volatility, procurement teams are taking smarter, data-driven approaches:
1. Diversification of Supply
- Avoid reliance on a single region. Many buyers are sourcing from Baltic States, Brazil, and New Zealand in addition to traditional Asian exporters.
2. Contract Flexibility
- Long-term contracts with variable pricing tied to indices (e.g., Random Lengths) are gaining popularity to reduce margin shocks.
3. Local Sourcing When Possible
- Nearshoring saw a 27% increase in 2024 as buyers sought to reduce carbon footprints and avoid global freight unpredictability.
4. Sustainability Verification Systems
- Procurement teams are increasingly investing in blockchain-backed supply tracing platforms to stay EUDR-compliant.
Real-World Examples: Industry Moves
- Home Depot has invested in direct sourcing deals with FSC-certified South American suppliers to stabilize their in-store plywood pricing.
- IKEA launched a 2025 initiative to move 70% of its wood furniture sourcing to EU-certified vendors to reduce compliance risk.
- Lendlease, a global construction firm, expanded CLT usage in all its North American projects to meet carbon neutrality targets.
Plywood Market Future Outlook: What to Expect in H2 2025 and Beyond
- Prices: Expect continued upward pressure through Q3 due to strong demand and supply lag.
- Demand: Strong growth in green construction, hybrid work furniture, and prefab modular housing.
- Innovation: AI in procurement forecasting and sustainable wood composite R&D are accelerating.
Conclusion:
In an industry where planning once followed predictable cycles, volatility is now the baseline. Navigating this new normal requires more than reactive buying—it requires strategic foresight, cross-functional coordination, and risk-managed procurement.
Mattias Knutsson, Strategic Leader in Global Procurement and Business Development, shares this perspective:
“The plywood and wood market today demands a hybrid mindset. Traditional sourcing logic—low cost, single-source, long lead times—no longer holds. Procurement leaders must now consider carbon impact, regulatory readiness, and real-time data as critical decision drivers. It’s about resilience, not just cost-efficiency.”
Knutsson emphasizes the importance of creating multi-scenario playbooks, building tiered supplier ecosystems, and ensuring sustainability doesn’t become an afterthought. He believes that in volatile markets, the most prepared teams win—not the cheapest bids.
