Higher raw material costs, an unseasonably warm winter and labour shortages have caused Russian lumber prices to spike, with increased transport costs to China (up 16%), Uzbekistan (up 18%), and Japan (7%) putting the squeeze on Russia’s timber supply chain.
That is according to the latest edition of the Russian Lumber Industry Insights – produced by Russian-based Lesprom Analytics, which reports that Russia’s housing market has declined for a fourth straight month – coming at a time when the country’s timber giants have turned inward to make up for lost markets due to the Ukraine war.
Last month, Wood Central reported that Russian timber had lost more than one-third of its export markets, with sanctions and interest rates crippling one of Vladimir Putin’s most important sources of funding. However, new reports from Russia show that transport companies have already begun lowering their costs – in preparation for Western companies re-entering the Russian market if and when Russia signs a new ceasefire with Ukraine – leading to the relaxation of sanctions.
In August, Wood Central reported that Russia’s invasion of Ukraine and the subsequent Western sanctions could increase the cost of industrial roundwood and finished wood products by more than 3% over the next decade. However, the long-term impact of the conflict is unlikely to move the needle, with the vast majority of forest-based products returning to pre-invasion levels over the next 10-30 years.
That is according to research, Projected Effects of the Russian Invasion of Ukraine on Global Forest Products Markets, published in Forest Policy and Economics. The study, published by North Carolina State University and the USDA Forest Service Forest Products Laboratory, reported that the United States, Canada, China, and other Asian countries are poised to compensate for the shortfall in wood-based panels, paperboard, and paper lost in Russia.
- For more information about the impact of the Ukraine war on the global timber supply chain, click here for Wood Central’s report.
