Russian lumber production edged up 3 per cent in April, even as sales deteriorated and exports fell, driving inventories higher as weak household purchasing power limits the domestic market’s capacity to absorb the surplus. That is according to the monthly Russian Lumber Industry Insights report, which found producers holding output steady whilst warehouse stocks climb on softening demand.
Companies are working to maintain production volumes, the report said, but stocks keep building because domestic demand is weakening. The economy ministry cut its growth outlook sharply in May, revising its GDP growth forecast to 0.4 per cent this year and 1.4 per cent in 2027, after the economy contracted by 0.3 per cent in the first quarter.
The fiscal backdrop has darkened alongside it, with the January–April budget deficit reaching 5.9 trillion roubles, equivalent to 2.5 per cent of GDP and roughly 1.5 times the government’s full-year plan. Construction has followed the wider slowdown, the completed building area falling 21 per cent in April from March to 6.5 million square metres and running 4 per cent lower year-on-year.
Housing commissioning told the same story, with completions across the first four months down 24 per cent year on year. The pressure has intensified abroad, where the crisis in China’s construction sector has cut import demand and sharpened price competition.
Chinese softwood lumber imports fell 33 per cent year-on-year in April to 967,000 cubic metres, with Russian shipments into China down 34 per cent over the month. Canadian volumes moved in the opposite direction and rose 4 per cent, whilst Belarusian exports to China fell 40 per cent and Finnish supply dropped 59 per cent.
Buyers have gravitated to the cheapest offers, and lower-priced Canadian lumber is gradually displacing costlier Russian and Belarusian product. Logistics costs for Russian suppliers have continued to climb, the report said, eroding the profitability of the shipments that remain.
The export squeeze comes as the Australian Forest Products Association warns that as much as 100,000 cubic metres of Russian-origin wood a year still reaches local homes, rerouted through China. The figure is enough to sit behind the plasterboard of up to 15,000 new builds each year, all of it escaping the 35 per cent conflict-timber tariff that was meant to shut Russian material out.
