Russia will reduce exports of wood and lumber in 2023

In 2023, Russia will reduce the export of wood and lumber by 7%, to 25 million cubic meters, according to Roslesinforg’s assessment. Compared to pre-crisis 2021, the drop will be 38.5%. More than half of all exports this year went to China, where lumber demand and prices have been under pressure due to problems in the local construction sector. In 2024, market participants do not rule out continued cooling of the real estate market in China.

Exports of lumber and round timber in 2023 will decrease by 7%, to 25 million cubic meters, the gap from pre-sanction 2021 will be 38.5%, Roslesinforg director Pavel Chashchin told Kommersant. At the same time, the export of deeply processed wood will approach last year’s figures – 21–22 million cubic meters.

The largest increase in supplies (2.3 times, up to 280 thousand cubic meters) falls on Turkey. The UAE increased imports by 64%, to 490 thousand cubic meters, Hong Kong – by 43%, to 600 thousand cubic meters, Kyrgyzstan – by 40%, to 418 thousand cubic meters.

At the same time, China remained Russia’s main trading partner, where about 14 million cubic meters of lumber and round timber were sent: exports of lumber to China increased by 3%, and supplies of unprocessed wood, as expected, fell by a quarter. Uzbekistan took second place among importers (more than 2 million cubic meters with an increase of approximately 5%). Kazakhstan closes the top three (more than 1.1 million cubic meters with an increase of 21%).

Last year, in addition to China and Uzbekistan, Finland was in the top three. This year, supplies to this country completely stopped. Next came Kazakhstan and Azerbaijan, followed by Estonia and Belarus. Singapore, Tajikistan and Hong Kong rounded out last year’s top ten.

At the same time, market participants note that the problem in 2023 was the stagnation of prices on the domestic market, which have not increased since June, as well as weak export demand and a 10% drop in prices on foreign markets from summer levels.

At the same time, in the past year, the problems of sending container trains with lumber to China have been largely resolved: a service for multimodal transportation through St. Petersburg is being developed, in which both Russian and Chinese carriers are actively participating. In the summer-autumn period, shipments through the Northern Sea Route increased. This allows sawmills to ship lumber for export quite rhythmically, although cheaper direct shipments through land border crossings to China remain difficult to access, Kommersant’s interlocutors say.

Executive Director of the Russian Pellet Union Vladimir Mammatov notes that in the process of searching for new markets, forestry enterprises were unable to fully redirect the released volumes to the markets of Asia and the Middle East, which resulted in a general decrease in the production of forest products. However, this process is proceeding faster than predicted, and, in his opinion, at the turn of 2026-2027, the industry could return to the export levels of record 2021. The expert notes that the state has extended a subsidy to compensate for part of the logistics costs for the export of timber industry products until 2024.

Vladimir Mammatov confirms that the ongoing stagnation in the real estate market in China did not allow high prices for lumber during the main demand season in the summer, but exporters partially compensated for this due to the weakening of the ruble. Since September, prices began to rise slightly amid a decrease in inventory levels, and export margins improved due to cheaper sea freight. However, next year, according to him, wood exporters expect a reduction in activity in the Chinese construction sector against the backdrop of actions by local authorities, but it is now impossible to assess the level of decline in the volume of lumber purchases. In this situation, diversification of exports and supplies to the domestic market are becoming increasingly important for timber industry enterprises.

Olga Mordyushenko