Lumber exports from Russia decreased in the first half of the year by 16%
Source：Vedomosti
From：Taiwan Trade Center, Moscow
Update Time：2023/08/16
Lumber supplies from Russia in January – June 2023 decreased by 16% year-on-year to about 10 million cubic meters. This follows from the data of the federal forest accounting institution "Roslesinforg", which was reviewed by Vedomosti.
The main products supplied abroad are boards and beams made of pine, spruce and larch. They are mainly used in construction. As Rosstat reported, the production of lumber in January – May 2023 (the latest available data) decreased by 10% to 11.5 million cubic meters.
According to the director of Roslesinforg, Pavel Chashchin, the rate of decline in sawn products exports is gradually decreasing. In the first two months of 2023, in comparison with January – February 2022, when Western sanctions were not yet in effect, the difference in supply volumes was exactly a quarter, he recalls (Vedomosti wrote about this on March 20).
In April 2022, the European Union included in the fifth package of sanctions against Russia due to its presence in Ukraine a ban on the supply of wood, plywood, wood slabs and pellets. This restriction has been in effect since July 10, 2022.
According to Chashchin, timber companies will promptly reorient supplies to the countries of the East, especially to China. "This makes it possible to compensate for the loss of European markets," he notes. Lumber supplies to China in the first six months of 2023, according to Roslesinforg, increased by 5% to more than 6 million cubic meters, and the share of China in the total volume of Russian exports of these products reached 61% against 44% in 2021 and 49% in 2022.
Also, Uzbekistan (1 million cubic meters, +5% year to year), Kazakhstan (408,000 cubic meters, +5%), the United Arab Emirates (254,000 cubic meters, a 2-fold increase), Hong Kong (245,000 cubic meters, +72%), Tajikistan (242,000 cubic meters, +27%), Iran (222,000 cubic meters) , +52%) and Kyrgyzstan (183,000 cubic meters, +45%). In addition, exports to Turkey increased 3 times - up to 145,000 cubic meters. m. In addition, according to Roslesinforg, there is an increase in the supply of Russian boards and timber to Georgia, Armenia, Afghanistan, Lebanon, Israel, Thailand, Mongolia, Malaysia, Syria and Panama, but these volumes are still small.
According to WhatWood, an industry consulting company, the largest lumber producers in Russia are Segezha Group, ULC, Lesozavod-25, Vologda Lesopromyshlenniki, Ilim Timber, Lesresurs-Rusforest, Luzales, Terneyles, Kraslesinvest and RFP Group. Vedomosti sent inquiries to these companies.
According to WhatWood, an industry consulting company, the largest lumber producers in Russia are Segezha Group, ULC, Lesozavod-25, Vologda Lesopromyshlenniki, Ilim Timber, Lesresurs-Rusforest, Luzales, Terneyles, Kraslesinvest and RFP Group. Vedomosti sent inquiries to these companies.
The chairman of the board of directors of Vologda Lesopromishlennikov, Alexander Churkin, said in an interview with Vedomosti in June 2023 that in the second half of 2022 the company began to supply approximately 70% of the volumes previously supplied to Europe to China. The company also continued deliveries to North Africa and the Middle East and increased deliveries to Central Asia (Uzbekistan, Tajikistan).
According to Churkin, at the end of June the price of spruce lumber of grades 1-4 was $190 per 1 cubic meter. m on the basis of CIF (“with delivery and insurance”) China. According to WhatWood, in May 2023, the average price of Russian spruce lumber in China on a CFR basis (“delivery to port”) Shanghai was $220 per 1 cubic meter. m, which was $ 10 below the level of April.
PRODUCTION AND EXPORT OF LUMBER in million cubic meters
|
|
2018
|
2019
|
2020
|
2021
|
2022
|
|
Production
|
28,5
|
30
|
29,3
|
32,3
|
29,0
|
|
Export
|
31,9
|
33,2
|
31,7
|
29,9
|
23,4
|
Source: Whatwood, Rosstat
According to the forecast of Irina Fomkina, an analyst at Sinara investment Bank, by the end of 2023, export prices of key Russian players in the supply of lumber to China will decrease by more than 20% year-on-year.
Europe has never been the main export market for Russian lumber, recalls Alexey Bogatyrev, CEO of the Lesprom Network timber products marketplace. In 2021, the export of domestic lumber to the region amounted to only 14% of total exports (4.4 million from 30.5 million cubic meters. m), the expert notes.
Even though Russian supplies of sawn timber increased in a number of directions in the first half of 2023, their total increase in the export of this product abroad did not exceed 1 million cubic meters. Bogatyrev gives his calculations. “Thus, it will be difficult for Russian suppliers to completely replace the European market,” the expert concludes.
According to him, the fall in the export of Russian sawn timber in 2023 may be "within 10%". The second half of the year will be compared to a lower base from the same period in 2022, when European sanctions were already in place, Bogatyrev explains. A more accurate assessment depends on the state of China's economy, which is still slowly recovering from anti-COVID lockdowns, he adds.
According to Fomkina, in addition to European sanctions, the decline in sawn timber exports in the first half of the year was affected by sufficient stocks in China. The level of stocks and purchase prices of local consumers will affect the dynamics of exports from Russia until the end of the year, Fomkina notes. If Chinese partners continue to offer contracts at low prices, Russian supplies will be limited, she expects.
At the same time, the products that were sent to the EU differ from those purchased by the PRC, reminds Fomkina. So, for example, plywood for China is supplied in a less processed form. Therefore, it is incorrect to talk about direct replacement of markets, the expert concludes.
Another challenge for Russian exporters is competition with Sweden and Finland, Bogatyrev notes. According to the expert, these countries have not only taken Russia's place in the European market, but are also aggressively increasing their presence in Asia and the Middle East, expanding production.
Source: https://www.vedomosti.ru/business/articles/2023/07/21/986275-eksport-pilomaterialov-iz-rossii-sokratilsya?utm_campaign=newspaper_21_7_2023&utm_medium=email&utm_source=vedomosti