Russian lumber exports down

Lumber exports from Russia have fallen for two consecutive quarters, with the 1Q/16 shipments being almost 10% lower than in the 3Q/15 according to Wood Resources Quarterly. Most of the decline has been in shipments to the CIS countries, including Uzbekistan, Azerbaijan and Tajikistan, but trade with Egypt and some European countries were also down.

Of the major trading partners, only Japan (+33%) and China (+10%) increased import of Russian lumber. However, the first quarter shipments this year were higher than they were in the 1Q/15.

Russian exports of softwood lumber has trended upward for over 15 years to reach a record high of over 23 million m3 in 2015 (as compared to seven million m3 in 2000). The dramatic change in shipments has mainly been the increase in demand for lumber in the Chinese market. From 2005 to 2015, exports from Russia to China were up from less than one million m3 to almost 10 million m3, a majority of which was Pine lumber from sawmills in Siberia and Russia’s Far East.

Europe has become a less important market for the Russian lumber industry over the past 10 years. Not only has the European slice of the total export pie diminished, but the total Russian export volumes the past few years have also been lower than in the past. In 2005, one-third of Russian lumber export volumes were destined for Europe (mainly the UK, Germany and Estonia), while only 12% of the total exports entered the European market in 2015.

Export prices have fallen quite substantially in US dollar terms the past two years at the same time as values in Ruble terms were close to record high levels in the 1Q/16. The past two years, export prices have declined 36% in US dollars, while they have gone up by about the same percentage in Ruble terms, according to the WRQ (www.woodprices.com). The price range for exported lumber in the 1Q/16 was quite wide with prices for higher-grade pine lumber destined for Japan being close to $250/m3, while lower-grade lumber shipped to China averaging only $92/m3.