Exports of lumber from the Russian Federation began to gradually recover

The Russian lumber sector is beginning to recover little by little. In eight months, exports reached 14 million cubic meters, almost 62% of them to China. With an overall drop of 13%, the key remaining foreign markets show an increase in purchases. Experts note that thanks to transport subsidies from the state, enterprises in the North-West of the Russian Federation and Siberia are increasing production, but the industry has not yet been able to cover the losses of 2022, and the crisis situation remains in a number of segments.

Exports of lumber from the Russian Federation in January-August exceeded 14 million cubic meters, Roslesinforg told Kommersant – this is 13% less than for the same period in 2022. The agency notes that China remains the leader among wood buyers, which accounted for almost two-thirds of supplies (61.7%, an increase of 2.7%). Also in the top five importers were Uzbekistan (10%, an increase of 0.5%), Kazakhstan (4.3%, an increase of 13.3%), as well as the United Arab Emirates (2.6%) and Hong Kong (2.4%). %), supplies to which increased by 1.9 and 1.5 times, respectively.

Roslesinforg notes that, despite the traditional summer slowdown in exports, 21 out of 51 countries purchasing wood from the Russian Federation showed an increase in export volumes year on year. The agency calls Syria a “new promising sales market” for lumber, where six companies sent trial batches of 40–150 cubic meters each.

In the structure of lumber exports, the most in demand are coniferous boards and beams – 13.3 million cubic meters, or 93.4%, another 5.6% is accounted for by softwood lumber products. The remaining part of the supply is occupied by goods made of oak, beech and ash. Roslesinforg clarified that most of Russian forest products are exported in processed form; round timber exports amounted to only 1.5 million cubic meters, 1.2 million cubic meters of which went to China. These are mainly birch timber, which is not in demand in Russia, the agency emphasized.

According to Roslesinforg director Pavel Chashchin, timber traders went through most of 2023 “without any major landslides or collapses.” Wood biofuel producers are having the hardest time, but they are also “gradually developing new markets.” Manufacturers of wood-based panels have been “emerging sustainable growth” in recent months, and plywood production has intensified. “Transportation costs for sending timber cargo to Asia by rail and sea have decreased due to subsidies, and due to the growth of domestic demand, the volume of product output in the North-West and Siberia has increased,” explained Mr. Chaschin.

The head of the committee on the timber industry, agriculture, environmental management and ecology of the Legislative Assembly of the Arkhangelsk region, Alexander Dyatlov, confirms that the market “gradually began to come to its senses.” According to him, the fall in prices stopped, and by the end of the summer “there was a slight upward correction.”

But Mr. Dyatlov clarifies that “taking into account the difficulties in the economy, the demand for lumber remains moderate, and stocks in warehouses are quite high.” The official also points to “an imbalance in the freight market.” In particular, according to him, in the North-West of the Russian Federation there is a large supply of containers with a shortage of platforms, while in Siberia there is a clear shortage of containers.

According to Alexander Dyatlov, even taking into account subsidies at the end of the year, large companies will not compensate for the losses of 2022. The situation is most difficult for sawmills: “In general, we can say that there is no particular activity or revival of demand in the third and fourth quarters. Lumber prices are lower than in the second quarter, but lower ocean shipping costs are narrowing the loss. At the same time, the low price of wood chips, and sometimes the lack of demand, do not allow us to achieve positive profitability.”

The Vyatka Chamber of Commerce and Industry also does not see prospects for increasing supplies by the end of the year, noting that “the most serious problems have arisen with the sale of pellets, the production of which in the region has actually decreased to zero.”

Olga Mordyushenko