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Introducing WOOD MARKETS/FEA’s fourth special report on Russia (the first report was issued in 2004). Through regular travel to Russia, conference and speaker presentations within Russia, industry tours, and more than 30 consulting assignments for Russian companies, our team has gained a deep understanding of where the Russian industry has come from and where, in our estimation, it is headed.
A profile of the Russian industry was provided in our Q3/2018 report, China’s Import Demand for Softwood Logs and Lumber to 2023. This new report on Russia is partially an extract from that larger study, but incorporates new field analysis in Siberia and the Russian Far East, with further investigations in China around how Russian logs and lumber fit into China and other export markets. Russia’s emerging competitiveness is something not well understood by most Western companies. It will become more important for major exporters to understand Russia’s emerging fit in key markets such as China, with likely significant implications for those who fail to do so.
Russia is one of the world’s dominant log and lumber producers and exporters. Due to its immense land mass, roughly half of which is forested, Russia accounts for nearly 20% of the world’s standing forest resource. As a result, it ranks as one of the world’s top players in the global trade of timber and wood products. Specifically:
- Russia harvested 157.6 million m3 of industrial softwood timber in 2017, and is the second-largest today with a 14.4% share of global softwood timber (logs)
- Russia is the third-largest softwood lumber producer (37.8 million m3 ), representing 11.1% of worldwide production
- Russia ranks second in log exports at 11.9 million m3 (14% global market share)
- Russia is the second-largest lumber exporter with 28 million m3 (22% of global market share)
- An overview of Russian log harvesting and wood products production trends
- Russia’s export fit in China and other key global log and lumber markets
- Cost benchmarking analysis of Russian sawmill costs and EBITDA earnings compared to key competing countries
- Delivered log and lumber costs to China for Russia and other key suppliers
- Outlook for China demand for logs and lumber to 2025 and Russia’s expected market share
- Price forecasts to 2025 in China for Russian and competing logs and lumber
- Questions Addressed
- How large will the ripple effect be beyond China in other export markets as Russia ramps up its exports?
- How will Russian log exports to China impact major log exporters, such as New Zealand, as well as major lumber exporters like Canada and Europe?
- When or where could further impacts be seen from Russian lumber exports as global supply demand dynamics continue to shift?
- What is the outlook for log and lumber exports from Russia to China and other key markets? What are the drivers/impediments?
- What are current delivered log and lumber costs to China from Russia and how do these compare to other exporters?
- Why are sawmill investments being made, not only by Russians in Russia, but also by Chinese companies?
- Where is Russian lumber positioned in China, and will various Chinese government policies benefit Russian exporters versus offshore exporters?
- Answers on Russia
- On the future potential of the Russian timber harvest, log exports and wood products production.
- On whether log exports will continue to decrease or rebound, and if China will remain the main market.
- On the competitiveness of Russian lumber in China and other markets.
- On the latest Russian government policies on log export taxes and quotas and their expected impact on China