Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber is increasingly constrained by freight costs, affordability and competition. GWMI continues its detailed coverage of the International Softwood Conference in Dublin.<\/p>\n
Following the European market discussions covered in Part 1 and the North American, Irish and UK presentations examined in Part 2, the afternoon session at ISC 2026 turned to Russia, Japan and the Middle East and North Africa.<\/p>\n
The three presentations described different pressures on the international softwood trade. Russia has lost much of the export business on which its modern sawmilling industry was built. Japan remains an important destination for European producers, but its housing market is shrinking and imported timber faces stronger competition from domestic species. In MENA, construction and infrastructure projects continue to generate demand, although the cost of supplying that demand has become increasingly difficult for both exporters and buyers.<\/p>\n
For European sawmills, the discussion went beyond the volume each market might absorb. Product specifications, grade distribution, exchange rates, transport costs and the purchasing power of customers all determine whether a destination provides a commercially viable outlet.<\/p>\n
A market may need timber without being able to pay the price a European producer requires. Low inventories may coexist with weak purchasing. Large forest resources may remain inaccessible or unprofitable to process. These were recurring issues in the session, which examined how changes in individual markets are affecting the wider allocation of softwood supply.<\/p>\n
Antti Koskinen opened his presentation by recalling his appearance at the conference in 2022, following Russia\u2019s invasion of Ukraine. Four years later, the war remained central to any assessment of the country\u2019s forest products industry.<\/p>\n
His presentation examined Russia\u2019s place in the global softwood market, the decline in exports, the prices available to Russian producers, developments in domestic demand and the financial condition of the sawmilling sector.<\/p>\n
The overall assessment was difficult. Russia retains an enormous forest resource, but its industry has lost access to important customers, become heavily dependent on a limited group of destinations and suffered a substantial deterioration in profitability. At the same time, restrictions affecting machinery and spare parts are making it harder to maintain production assets.<\/p>\n
Forest resources do not translate directly into available supply<\/strong><\/p>\n Russia\u2019s forest area gives it a potentially dominant position in softwood production. Koskinen nevertheless cautioned against treating the size of that resource as a measure of the timber that can be brought economically to market.<\/p>\n He identified three principal limitations.<\/p>\n The first is forest productivity. Annual wood production per hectare remains low compared with Finland and Sweden, including in areas with broadly comparable climatic conditions and species. The available resource is therefore very different from an intensively managed forest estate supported by established harvesting and processing infrastructure.<\/p>\n The second is access. Much of Russia\u2019s forest lies in remote areas, far from the roads, railways and industrial facilities needed to support commercial harvesting. Expanding the usable wood supply requires investment in transport infrastructure as well as harvesting capacity.<\/p>\n The third is the limited market for residues. In many producing areas, sawmills lack nearby customers for chips, sawdust and other by-products. Pulp and panel capacity provides outlets in some locations, but the network is insufficient to make full use of the available material. Pellet production absorbs part of the residue stream, although it does not resolve the wider problem.<\/p>\n These limitations affect the economics of the entire operation. Where a mill cannot sell its residues, a larger share of its costs must be recovered from sawn timber alone.<\/p>\n Koskinen put Russia\u2019s theoretical allowable cut at roughly 700 million m\u00b3 a year, compared with actual harvesting of around 170 million m\u00b3. The gap is substantial, but closing it would require much more than stronger demand for lumber.<\/p>\n <\/a><\/p>\n Species composition also limits the extent to which different Russian regions can substitute for European supply. The north-west has a forest composition more familiar to Nordic buyers, while pine and larch become more prominent further east, particularly in Siberia and the Far East.<\/p>\n Consequently, even if trade conditions were to change, the large forest resources of eastern Russia would not automatically provide a replacement for every spruce product used in Europe.<\/p>\n The export downturn began before the invasion<\/strong><\/p>\n Koskinen traced the development of Russia\u2019s modern sawmilling industry through two distinct phases.<\/p>\n At the beginning of the century, investment was concentrated heavily in the north-west. Nordic and Central European companies were among those building or acquiring sawmills, with much of the resulting production directed towards European customers.<\/p>\n After the global financial crisis, the focus shifted increasingly towards China. Weak demand in Europe coincided with Russian measures restricting log exports, encouraging more processing within Russia and a greater flow of sawn timber to Chinese buyers.<\/p>\n The expansion was rapid. During the subsequent growth period, Russian lumber exports increased at close to 10% a year, according to Koskinen\u2019s account.<\/p>\n That development also created a major concentration risk. A growing share of the industry depended on a single market whose demand was closely connected to construction and property development.<\/p>\n For this reason, Koskinen argued that the crisis in Russian sawmilling did not begin with the invasion of Ukraine. The downturn had already started as China\u2019s property market weakened.<\/p>\n Russian softwood lumber exports peaked at approximately 31 million m\u00b3 in 2019. In the more recent period discussed in the presentation, they had fallen to around 14 million m\u00b3.<\/p>\n <\/a><\/p>\n <\/p>\n The contraction combined two large losses: the reduction in Chinese demand and the subsequent loss of the European market. Koskinen estimated that the Chinese downturn had removed roughly 8 million to 10 million m\u00b3 of business, while the loss of European customers accounted for more than 5 million m\u00b3.<\/p>\n Those volumes have proved difficult to replace.<\/p>\n <\/a><\/p>\n A limited customer base weighs on realised prices<\/strong><\/p>\n Russia\u2019s remaining export business is concentrated heavily on China and a group of former Soviet markets, including countries such as Kazakhstan and Azerbaijan.<\/p>\n <\/a><\/p>\n That narrower market mix affects both negotiating power and average revenue.<\/p>\n Koskinen\u2019s price comparisons indicated that Japan and some Middle Eastern and North African destinations offered better returns than much of the remaining export portfolio. However, these markets do not absorb enough volume to compensate for the concentration in lower-priced destinations.<\/p>\n <\/a><\/p>\n He also cautioned that average prices need to be interpreted alongside product quality. Russian shipments to China include products that are not directly comparable with the kiln-dried, graded material typically supplied by Nordic exporters. Green material, squares and lower grades all influence the average.<\/p>\n <\/a><\/p>\n Even allowing for those differences, his assessment was that Russia\u2019s overall sales mix leaves producers with insufficient revenue to sustain healthy margins.<\/p>\n The problem is therefore larger than a reduction in export volume. Mills have lost customers, shifted towards a narrower selection of destinations and received weaker average returns on the material they continue to sell.<\/a><\/p>\n <\/a><\/p>\n Production statistics provide an incomplete picture<\/strong><\/p>\n Koskinen questioned how accurately official Russian production statistics describe the condition of the industry.<\/p>\n Reported production has fallen much less sharply than exports. Taken at face value, the figures would imply a very large increase in domestic consumption.<\/p>\n He considered that interpretation doubtful.<\/p>\n <\/a><\/p>\n <\/a><\/p>\n One difficulty is the relationship between historical production and export figures. In some years, the reported export volume was close to the officially recorded production total, leaving little apparent room for domestic consumption.<\/p>\n For Koskinen, this inconsistency limits the usefulness of a simple calculation in which exports are deducted from production to estimate the Russian market.<\/p>\n Trade data reported by importing countries provide a more reliable indication of developments in export activity. Since Russia no longer publishes the same level of export detail, these partner-country statistics have become particularly important.<\/p>\n Regional production patterns also reveal differences within the industry. The north-west had recovered part of its earlier decline in the official figures shown, while Siberia and the Far East remained under more pronounced pressure.<\/p>\n Those eastern regions have traditionally supplied China, making them particularly exposed to the contraction in Chinese demand.<\/p>\n Domestic construction offers some support<\/strong><\/p>\n The domestic market was one of the few comparatively positive elements in Koskinen\u2019s presentation.<\/p>\n Russian construction activity has provided support to timber consumption, with growth in several residential and non-residential indicators during the period he examined.<\/p>\n <\/a><\/p>\n However, he did not regard this as sufficient evidence that domestic timber demand had expanded to the extent implied by the official production and export figures.<\/p>\n His assessment was that larger sawmills, historically organised around export customers, are increasingly having to sell within Russia.<\/p>\n That changes the structure of the domestic market. Smaller local mills traditionally supplied much of this business, while larger modern operations concentrated on exports.<\/p>\n As export opportunities diminish, those larger producers must compete more actively for domestic customers. This may provide an outlet for part of their output, but it does not necessarily replace the prices, specifications or commercial relationships available in their former export markets.<\/p>\n <\/a><\/p>\n <\/a><\/p>\n Currency, financing and logistics compound the pressure<\/strong><\/p>\n Recent trade developments offered little evidence of a sustained recovery.<\/p>\n In the year-to-date figures cited by Koskinen, Russian shipments to China were down by nearly 17%, while deliveries to Japan had fallen by approximately 24%. The precise reporting periods will need to be read alongside the presentation charts.<\/p>\n <\/a><\/p>\n Beyond demand, producers face several additional constraints.<\/p>\n A stronger rouble reduces the domestic-currency proceeds of export sales. High financing costs make it difficult to invest, refinance or carry working capital. Transport restrictions and competing demands for rail capacity complicate deliveries to distant customers.<\/p>\n Rail access is especially important for shipments to China. Yet the forest products industry does not necessarily receive priority when transport capacity is allocated.<\/p>\n <\/a><\/p>\n For mills in the north-west, the loss of established European routes has also made the logistics of reaching alternative customers more difficult.<\/p>\n These costs accumulate along the supply chain. A producer may retain access to a buyer but still face a much weaker commercial outcome once transport, financing and currency effects are included.<\/p>\n <\/a><\/p>\n Maintenance problems threaten the productive asset base<\/strong><\/p>\n Koskinen devoted particular attention to the industry\u2019s dependence on Western machinery.<\/p>\n Modern Russian forestry and sawmilling operations were built partly around imported harvesting equipment, processing lines, spare parts and technical services.<\/p>\n Restricted access to those inputs creates difficulties that cannot always be resolved by finding a new supplier for an individual component.<\/p>\n Some equipment and parts continue to reach Russia through third countries or manufacturing locations outside Europe. Producers have also turned towards domestic equipment and Chinese machinery.<\/p>\n However, Koskinen said these alternatives do not always provide equivalent productivity or performance.<\/p>\n The result is a gradual deterioration in the technical condition of parts of the industry. Weak profitability reduces the money available for maintenance, while procurement restrictions make maintenance harder even where funds are available.<\/p>\n This creates a longer-term problem. A recovery in orders would not necessarily allow every mill to return immediately to its former production level or operating efficiency.<\/p>\n Financial results show the scale of the damage<\/strong><\/p>\n The company results presented by Koskinen indicated a substantial decline in revenue and widespread operating losses among the businesses examined.<\/p>\n Several mills reported deeply negative margins, with some losses reaching double-digit percentages of turnover.<\/p>\n He also distinguished between assets previously developed and operated by Western companies and other Russian-owned operations.<\/p>\n The former Western assets appeared, in his comparison, to have retained a stronger relative position. Their location, equipment and earlier operating standards may have helped them withstand the deterioration in market conditions.<\/p>\n Nevertheless, this was a comparison within a struggling industry. Better relative performance did not mean that the underlying commercial environment was favourable.<\/p>\n Job cuts, financial distress and bankruptcies were already part of the adjustment.<\/p>\n Europe has adapted, but product markets differ<\/strong><\/p>\n Koskinen\u2019s assessment was that Europe has managed without Russian softwood lumber.<\/p>\n The loss of that supply did not create a continuing shortage across the European softwood market. Weak construction demand and adjustments elsewhere in the supply chain have allowed the market to function without a return to its former Russian trade flows.<\/p>\n <\/a><\/p>\n He contrasted this with birch plywood, where Russia previously supplied a much larger share of European requirements.<\/p>\n The plywood market has different production constraints and fewer readily available substitutes. Restricted supply has therefore had a different effect on prices and profitability.<\/p>\n <\/a><\/p>\n His comparison cautioned against applying the experience of one wood product to another. Russia\u2019s importance varies considerably by product, and the commercial consequences of losing its supply differ accordingly.<\/p>\n For Russian sawmilling, however, the outlook remained difficult. Koskinen saw little prospect of Chinese demand quickly returning to its former peak, while the timing and conditions of any renewed European access remained uncertain.<\/p>\n <\/a><\/p>\n Domestic construction provides some support, but the industry continues to face lower export volumes, a weaker market mix, poor profitability and growing problems maintaining its assets.<\/p>\n Hiroki Hayashi approached Japan\u2019s timber market from both a trading and a housing perspective.<\/p>\n Sumitomo Forestry\u2019s activities span timber procurement, housebuilding and property-related businesses in Japan and overseas. That combination provided the basis for a presentation linking imported softwood demand to housing affordability, construction methods and competition from domestic species.<\/p>\n His central assessment was that Japan remains an important market for European suppliers, but growth cannot be assumed within its traditional residential business.<\/p>\n Housing starts face long-term demographic pressure. The weak yen raises the cost of imports. Japanese species have become more competitive in applications where they can meet the required specifications.<\/p>\n At the same time, non-residential timber construction offers opportunities that are still relatively underdeveloped.<\/p>\n Demographics constrain the housing market<\/strong><\/p>\n Japan\u2019s population is both ageing and declining.<\/p>\n Hayashi cited a population of around 123 million, with approximately 30% aged 65 or above. These trends have direct consequences for household formation and the number of new homes required.<\/p>\n <\/a><\/p>\n His presentation used a housing-start level of roughly 740,000 units as a reference point and discussed scenarios involving further declines.<\/p>\n The pressures extend beyond population. Higher building costs, affordability constraints and changes in the housing market also affect demand.<\/p>\n Wooden housing nevertheless retains a strong position within the total. Hayashi put its share at around 55\u201360% of housing units, supported by an established network of builders, component manufacturers and suppliers.<\/p>\n <\/a><\/p>\n This provides a substantial base for timber consumption. However, a stable share within a declining housing market does not guarantee stable volumes.<\/p>\n European suppliers therefore face a market in which timber can remain a preferred construction material while the total number of projects falls.<\/p>\n Affordability is weakening despite relatively low mortgage rates<\/strong><\/p>\n Hayashi examined the widening gap between household incomes and housing costs.<\/p>\n Salary growth has been limited over a long period, while the cost of land and construction has increased. The pressure is particularly visible in large urban markets.<\/p>\n <\/a><\/p>\n He pointed to strong apartment-price increases in Tokyo, where land costs, construction expenses and concentrated demand have pushed prices upwards.<\/p>\n Detached housing has, in some cases, remained relatively more accessible. Developers and housebuilders have helped control the total purchase price by reducing plot sizes and adjusting the housing offer.<\/p>\n Financing conditions are another source of pressure.<\/p>\n Japanese mortgage rates remain relatively low compared with those in many other countries, but their direction matters. A gradual increase adds to the cost of buying a home at a time when construction and land are already expensive.<\/p>\n <\/a><\/p>\n Hayashi noted that variable-rate mortgages account for a large share of the market. Changes in financing costs therefore influence purchasing decisions even when the absolute interest rate appears modest by international standards.<\/p>\n The yen directly affects imported timber\u2019s competitiveness<\/strong><\/p>\n Exchange rates are central to the relationship between Japanese buyers and European suppliers.<\/p>\n A weaker yen increases the local-currency cost of imported timber, making it harder for importers to compete against domestic material or pass higher costs through to customers.<\/p>\n Hayashi cited an exchange rate of around \u00a5177 to the euro at the time of his presentation, compared with an even weaker level of approximately \u00a5185 a month earlier.<\/p>\n <\/a><\/p>\n Such movements can alter the relative attractiveness of an imported product within a short period.<\/p>\n For European producers, a stable euro price may still result in a significant price increase for a Japanese customer. Equally, a strengthening yen can improve purchasing conditions without any reduction in the exporter\u2019s price.<\/p>\n Hayashi therefore treated currency movements as a continuing commercial variable, rather than background economic information.<\/p>\n Europe retains a major role in Japan\u2019s softwood supply<\/strong><\/p>\n Japan remains a substantial importer of softwood products, with Europe accounting for roughly half of the import volume discussed in the presentation.<\/p>\n Hayashi put European softwood deliveries at around 2 million m\u00b3 a year, within a total imported softwood volume of approximately 4 million m\u00b3.<\/p>\n <\/a><\/p>\n Finland and Sweden dominate European supply, together accounting for more than 70% of the European total cited.<\/p>\n <\/a><\/p>\n The trade covers several different product groups and end uses.<\/p>\n European lamina is used in the manufacture of glued laminated products. Other supplies serve Japanese post-and-beam construction and the dimension-lumber market associated with two-by-four housing.<\/p>\n Species and specifications vary by application. European redwood and whitewood do not compete in precisely the same way across all products, and their exposure to substitution by Japanese species also differs.<\/p>\n <\/a><\/p>\n This means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n <\/a><\/p>\n Low inventories are not evidence of a buying recovery<\/strong><\/p>\n Hayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\n He used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n <\/a><\/p>\n However, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\n Customers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\n The distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\n Hayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\n For exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\n Domestic species are gaining ground<\/strong><\/p>\n Japanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n <\/a><\/p>\n Hayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\n When imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\n Substitution is easier in some applications than others.<\/p>\n Posts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\n European products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\n Beams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\n His assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\n European suppliers must compete on the requirements of each application<\/strong><\/p>\n The practical consequence is a more demanding sales environment.<\/p>\n European suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\n A buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\n The resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\n Hayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\n Those relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\n Non-residential construction offers room for expansion<\/strong><\/p>\n Hayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\n Wood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\n His presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\n This leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\n Decarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\n The industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\n Sumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\n The intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\n Standardisation is a major obstacle<\/strong><\/p>\n Hayashi identified a recurring problem in non-residential projects.<\/p>\n Designers, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\n Those requirements can be difficult to supply.<\/p>\n A manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\n The customer may then return to steel or concrete.<\/p>\n Hayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\n The established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\n For European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n <\/a><\/p>\n Hayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\n Franz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\n The region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\n Those underlying conditions continue to support demand.<\/p>\n However, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\n He also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\n A large regional market with divergent national trends<\/strong><\/p>\n Kropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\n He noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\n The population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\n Nevertheless, population growth does not translate automatically into imports at any available price.<\/p>\n Kropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\n Within that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\n Disruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\n Freight and conflict alter the economics of trade<\/strong><\/p>\n Kropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\n His presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\n For timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\n A market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\n Customers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\n Kropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\n Redirected supply creates pressure elsewhere<\/strong><\/p>\n North Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\n Additional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\n Kropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\n This is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\n A destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\n For European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\n Egypt remains essential for Nordic lower grades<\/strong><\/p>\n Egypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\n The country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\n Construction, infrastructure and tourism investment support additional demand.<\/p>\n For Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\n Kropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\n The relationship is therefore shaped by the full production mix of a sawmill.<\/p>\n A producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\n Egypt provides that outlet on a scale that is difficult to replace.<\/p>\n Kropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\n Egyptian purchasing had strengthened during the year<\/strong><\/p>\n The monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\n On that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\n However, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\n Egypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\n Kropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\n Where the answer is uncertain, demand alone offers limited reassurance.<\/p>\n Saudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\n Saudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n <\/a><\/p>\n Kropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\n He referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\n However, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\n The approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\n Kropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\n For timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\n End uses determine both specifications and substitution risks<\/strong><\/p>\n Much of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\n This affects the characteristics of the market.<\/p>\n Customers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\n European producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\n Pallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\n Kropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\n Logistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\n These arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\n Morocco: favourable project demand, with growing competition<\/strong><\/p>\n Kropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\n Preparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n <\/a><\/p>\n However, he expected some easing from the strong conditions of the previous two years.<\/p>\n His presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\n Competition is increasing.<\/p>\n Plantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\n He reported weaker shipments from Germany and Austria in the period discussed.<\/p>\n Morocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\n The commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n <\/a><\/p>\n Algeria: import licences restrict access to underlying demand<\/strong><\/p>\n In Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\n The country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n <\/a><\/p>\n This creates a constraint that is different from weak consumption.<\/p>\n A buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\n For exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n <\/a><\/p>\n Kropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\n Higher European costs may accelerate substitution<\/strong><\/p>\n Kropfreiter returned repeatedly to the question of affordability.<\/p>\n European sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\n Buyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\n Formwork provides one example.<\/p>\n Where plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\n The competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\n Species substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\n These adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\n MENA competes with other destinations for the same wood<\/strong><\/p>\n The region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\n Kropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\n If another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\n MENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\n That competition may become more difficult if European log costs rise or supply tightens.<\/p>\n At the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n <\/a><\/p>\n His assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\n Egypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\n Questions from the floor<\/strong><\/p>\n The questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\n A participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\n Koskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\n The questioner acknowledged the clarification.<\/p>\n <\/a><\/p>\n The exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\n No further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\n Export opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\n The three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\n Russia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\n Japan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\n MENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\n For European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\n The session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\n GWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":" Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading <\/h4>\n
Hiroki Hayashi, Sumitomo Forestry Europe: Japan- European timber remains necessary, but competition is becoming harder<\/em><\/h4>\n
Franz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n
![<\/a>Antti Koskinen<\/figcaption><\/figure>\nAntti Koskinen opened his presentation by recalling his appearance at the conference in 2022, following Russia\u2019s invasion of Ukraine. Four years later, the war remained central to any assessment of the country\u2019s forest products industry.<\/p>\nHis presentation examined Russia\u2019s place in the global softwood market, the decline in exports, the prices available to Russian producers, developments in domestic demand and the financial condition of the sawmilling sector.<\/p>\nThe overall assessment was difficult. Russia retains an enormous forest resource, but its industry has lost access to important customers, become heavily dependent on a limited group of destinations and suffered a substantial deterioration in profitability. At the same time, restrictions affecting machinery and spare parts are making it harder to maintain production assets.<\/p>\nForest resources do not translate directly into available supply<\/strong><\/p>\nRussia\u2019s forest area gives it a potentially dominant position in softwood production. Koskinen nevertheless cautioned against treating the size of that resource as a measure of the timber that can be brought economically to market.<\/p>\nHe identified three principal limitations.<\/p>\nThe first is forest productivity. Annual wood production per hectare remains low compared with Finland and Sweden, including in areas with broadly comparable climatic conditions and species. The available resource is therefore very different from an intensively managed forest estate supported by established harvesting and processing infrastructure.<\/p>\nThe second is access. Much of Russia\u2019s forest lies in remote areas, far from the roads, railways and industrial facilities needed to support commercial harvesting. Expanding the usable wood supply requires investment in transport infrastructure as well as harvesting capacity.<\/p>\nThe third is the limited market for residues. In many producing areas, sawmills lack nearby customers for chips, sawdust and other by-products. Pulp and panel capacity provides outlets in some locations, but the network is insufficient to make full use of the available material. Pellet production absorbs part of the residue stream, although it does not resolve the wider problem.<\/p>\nThese limitations affect the economics of the entire operation. Where a mill cannot sell its residues, a larger share of its costs must be recovered from sawn timber alone.<\/p>\nKoskinen put Russia\u2019s theoretical allowable cut at roughly 700 million m\u00b3 a year, compared with actual harvesting of around 170 million m\u00b3. The gap is substantial, but closing it would require much more than stronger demand for lumber.<\/p>\n<\/a><\/p>\nSpecies composition also limits the extent to which different Russian regions can substitute for European supply. The north-west has a forest composition more familiar to Nordic buyers, while pine and larch become more prominent further east, particularly in Siberia and the Far East.<\/p>\nConsequently, even if trade conditions were to change, the large forest resources of eastern Russia would not automatically provide a replacement for every spruce product used in Europe.<\/p>\nThe export downturn began before the invasion<\/strong><\/p>\nKoskinen traced the development of Russia\u2019s modern sawmilling industry through two distinct phases.<\/p>\nAt the beginning of the century, investment was concentrated heavily in the north-west. Nordic and Central European companies were among those building or acquiring sawmills, with much of the resulting production directed towards European customers.<\/p>\nAfter the global financial crisis, the focus shifted increasingly towards China. Weak demand in Europe coincided with Russian measures restricting log exports, encouraging more processing within Russia and a greater flow of sawn timber to Chinese buyers.<\/p>\nThe expansion was rapid. During the subsequent growth period, Russian lumber exports increased at close to 10% a year, according to Koskinen\u2019s account.<\/p>\nThat development also created a major concentration risk. A growing share of the industry depended on a single market whose demand was closely connected to construction and property development.<\/p>\nFor this reason, Koskinen argued that the crisis in Russian sawmilling did not begin with the invasion of Ukraine. The downturn had already started as China\u2019s property market weakened.<\/p>\nRussian softwood lumber exports peaked at approximately 31 million m\u00b3 in 2019. In the more recent period discussed in the presentation, they had fallen to around 14 million m\u00b3.<\/p>\n<\/a><\/p>\n <\/p>\nThe contraction combined two large losses: the reduction in Chinese demand and the subsequent loss of the European market. Koskinen estimated that the Chinese downturn had removed roughly 8 million to 10 million m\u00b3 of business, while the loss of European customers accounted for more than 5 million m\u00b3.<\/p>\nThose volumes have proved difficult to replace.<\/p>\n<\/a><\/p>\nA limited customer base weighs on realised prices<\/strong><\/p>\nRussia\u2019s remaining export business is concentrated heavily on China and a group of former Soviet markets, including countries such as Kazakhstan and Azerbaijan.<\/p>\n<\/a><\/p>\nThat narrower market mix affects both negotiating power and average revenue.<\/p>\nKoskinen\u2019s price comparisons indicated that Japan and some Middle Eastern and North African destinations offered better returns than much of the remaining export portfolio. However, these markets do not absorb enough volume to compensate for the concentration in lower-priced destinations.<\/p>\n<\/a><\/p>\nHe also cautioned that average prices need to be interpreted alongside product quality. Russian shipments to China include products that are not directly comparable with the kiln-dried, graded material typically supplied by Nordic exporters. Green material, squares and lower grades all influence the average.<\/p>\n<\/a><\/p>\nEven allowing for those differences, his assessment was that Russia\u2019s overall sales mix leaves producers with insufficient revenue to sustain healthy margins.<\/p>\nThe problem is therefore larger than a reduction in export volume. Mills have lost customers, shifted towards a narrower selection of destinations and received weaker average returns on the material they continue to sell.<\/a><\/p>\n<\/a><\/p>\nProduction statistics provide an incomplete picture<\/strong><\/p>\nKoskinen questioned how accurately official Russian production statistics describe the condition of the industry.<\/p>\nReported production has fallen much less sharply than exports. Taken at face value, the figures would imply a very large increase in domestic consumption.<\/p>\nHe considered that interpretation doubtful.<\/p>\n<\/a><\/p>\n<\/a><\/p>\nOne difficulty is the relationship between historical production and export figures. In some years, the reported export volume was close to the officially recorded production total, leaving little apparent room for domestic consumption.<\/p>\nFor Koskinen, this inconsistency limits the usefulness of a simple calculation in which exports are deducted from production to estimate the Russian market.<\/p>\nTrade data reported by importing countries provide a more reliable indication of developments in export activity. Since Russia no longer publishes the same level of export detail, these partner-country statistics have become particularly important.<\/p>\nRegional production patterns also reveal differences within the industry. The north-west had recovered part of its earlier decline in the official figures shown, while Siberia and the Far East remained under more pronounced pressure.<\/p>\nThose eastern regions have traditionally supplied China, making them particularly exposed to the contraction in Chinese demand.<\/p>\nDomestic construction offers some support<\/strong><\/p>\nThe domestic market was one of the few comparatively positive elements in Koskinen\u2019s presentation.<\/p>\nRussian construction activity has provided support to timber consumption, with growth in several residential and non-residential indicators during the period he examined.<\/p>\n<\/a><\/p>\nHowever, he did not regard this as sufficient evidence that domestic timber demand had expanded to the extent implied by the official production and export figures.<\/p>\nHis assessment was that larger sawmills, historically organised around export customers, are increasingly having to sell within Russia.<\/p>\nThat changes the structure of the domestic market. Smaller local mills traditionally supplied much of this business, while larger modern operations concentrated on exports.<\/p>\nAs export opportunities diminish, those larger producers must compete more actively for domestic customers. This may provide an outlet for part of their output, but it does not necessarily replace the prices, specifications or commercial relationships available in their former export markets.<\/p>\n<\/a><\/p>\n<\/a><\/p>\nCurrency, financing and logistics compound the pressure<\/strong><\/p>\nRecent trade developments offered little evidence of a sustained recovery.<\/p>\nIn the year-to-date figures cited by Koskinen, Russian shipments to China were down by nearly 17%, while deliveries to Japan had fallen by approximately 24%. The precise reporting periods will need to be read alongside the presentation charts.<\/p>\n<\/a><\/p>\nBeyond demand, producers face several additional constraints.<\/p>\nA stronger rouble reduces the domestic-currency proceeds of export sales. High financing costs make it difficult to invest, refinance or carry working capital. Transport restrictions and competing demands for rail capacity complicate deliveries to distant customers.<\/p>\nRail access is especially important for shipments to China. Yet the forest products industry does not necessarily receive priority when transport capacity is allocated.<\/p>\n<\/a><\/p>\nFor mills in the north-west, the loss of established European routes has also made the logistics of reaching alternative customers more difficult.<\/p>\nThese costs accumulate along the supply chain. A producer may retain access to a buyer but still face a much weaker commercial outcome once transport, financing and currency effects are included.<\/p>\n<\/a><\/p>\nMaintenance problems threaten the productive asset base<\/strong><\/p>\nKoskinen devoted particular attention to the industry\u2019s dependence on Western machinery.<\/p>\nModern Russian forestry and sawmilling operations were built partly around imported harvesting equipment, processing lines, spare parts and technical services.<\/p>\nRestricted access to those inputs creates difficulties that cannot always be resolved by finding a new supplier for an individual component.<\/p>\nSome equipment and parts continue to reach Russia through third countries or manufacturing locations outside Europe. Producers have also turned towards domestic equipment and Chinese machinery.<\/p>\nHowever, Koskinen said these alternatives do not always provide equivalent productivity or performance.<\/p>\nThe result is a gradual deterioration in the technical condition of parts of the industry. Weak profitability reduces the money available for maintenance, while procurement restrictions make maintenance harder even where funds are available.<\/p>\nThis creates a longer-term problem. A recovery in orders would not necessarily allow every mill to return immediately to its former production level or operating efficiency.<\/p>\nFinancial results show the scale of the damage<\/strong><\/p>\nThe company results presented by Koskinen indicated a substantial decline in revenue and widespread operating losses among the businesses examined.<\/p>\nSeveral mills reported deeply negative margins, with some losses reaching double-digit percentages of turnover.<\/p>\nHe also distinguished between assets previously developed and operated by Western companies and other Russian-owned operations.<\/p>\nThe former Western assets appeared, in his comparison, to have retained a stronger relative position. Their location, equipment and earlier operating standards may have helped them withstand the deterioration in market conditions.<\/p>\nNevertheless, this was a comparison within a struggling industry. Better relative performance did not mean that the underlying commercial environment was favourable.<\/p>\nJob cuts, financial distress and bankruptcies were already part of the adjustment.<\/p>\nEurope has adapted, but product markets differ<\/strong><\/p>\nKoskinen\u2019s assessment was that Europe has managed without Russian softwood lumber.<\/p>\nThe loss of that supply did not create a continuing shortage across the European softwood market. Weak construction demand and adjustments elsewhere in the supply chain have allowed the market to function without a return to its former Russian trade flows.<\/p>\n<\/a><\/p>\nHe contrasted this with birch plywood, where Russia previously supplied a much larger share of European requirements.<\/p>\nThe plywood market has different production constraints and fewer readily available substitutes. Restricted supply has therefore had a different effect on prices and profitability.<\/p>\n<\/a><\/p>\nHis comparison cautioned against applying the experience of one wood product to another. Russia\u2019s importance varies considerably by product, and the commercial consequences of losing its supply differ accordingly.<\/p>\nFor Russian sawmilling, however, the outlook remained difficult. Koskinen saw little prospect of Chinese demand quickly returning to its former peak, while the timing and conditions of any renewed European access remained uncertain.<\/p>\n<\/a><\/p>\nDomestic construction provides some support, but the industry continues to face lower export volumes, a weaker market mix, poor profitability and growing problems maintaining its assets.<\/p>\n<\/h4>\nHiroki Hayashi, Sumitomo Forestry Europe: Japan- European timber remains necessary, but competition is becoming harder<\/em><\/h4>\n<\/a>Hiroki Hayashi<\/figcaption><\/figure>\nHiroki Hayashi approached Japan\u2019s timber market from both a trading and a housing perspective.<\/p>\nSumitomo Forestry\u2019s activities span timber procurement, housebuilding and property-related businesses in Japan and overseas. That combination provided the basis for a presentation linking imported softwood demand to housing affordability, construction methods and competition from domestic species.<\/p>\nHis central assessment was that Japan remains an important market for European suppliers, but growth cannot be assumed within its traditional residential business.<\/p>\nHousing starts face long-term demographic pressure. The weak yen raises the cost of imports. Japanese species have become more competitive in applications where they can meet the required specifications.<\/p>\nAt the same time, non-residential timber construction offers opportunities that are still relatively underdeveloped.<\/p>\nDemographics constrain the housing market<\/strong><\/p>\nJapan\u2019s population is both ageing and declining.<\/p>\nHayashi cited a population of around 123 million, with approximately 30% aged 65 or above. These trends have direct consequences for household formation and the number of new homes required.<\/p>\n<\/a><\/p>\nHis presentation used a housing-start level of roughly 740,000 units as a reference point and discussed scenarios involving further declines.<\/p>\nThe pressures extend beyond population. Higher building costs, affordability constraints and changes in the housing market also affect demand.<\/p>\nWooden housing nevertheless retains a strong position within the total. Hayashi put its share at around 55\u201360% of housing units, supported by an established network of builders, component manufacturers and suppliers.<\/p>\n<\/a><\/p>\nThis provides a substantial base for timber consumption. However, a stable share within a declining housing market does not guarantee stable volumes.<\/p>\nEuropean suppliers therefore face a market in which timber can remain a preferred construction material while the total number of projects falls.<\/p>\nAffordability is weakening despite relatively low mortgage rates<\/strong><\/p>\nHayashi examined the widening gap between household incomes and housing costs.<\/p>\nSalary growth has been limited over a long period, while the cost of land and construction has increased. The pressure is particularly visible in large urban markets.<\/p>\n<\/a><\/p>\nHe pointed to strong apartment-price increases in Tokyo, where land costs, construction expenses and concentrated demand have pushed prices upwards.<\/p>\nDetached housing has, in some cases, remained relatively more accessible. Developers and housebuilders have helped control the total purchase price by reducing plot sizes and adjusting the housing offer.<\/p>\nFinancing conditions are another source of pressure.<\/p>\nJapanese mortgage rates remain relatively low compared with those in many other countries, but their direction matters. A gradual increase adds to the cost of buying a home at a time when construction and land are already expensive.<\/p>\n<\/a><\/p>\nHayashi noted that variable-rate mortgages account for a large share of the market. Changes in financing costs therefore influence purchasing decisions even when the absolute interest rate appears modest by international standards.<\/p>\nThe yen directly affects imported timber\u2019s competitiveness<\/strong><\/p>\nExchange rates are central to the relationship between Japanese buyers and European suppliers.<\/p>\nA weaker yen increases the local-currency cost of imported timber, making it harder for importers to compete against domestic material or pass higher costs through to customers.<\/p>\nHayashi cited an exchange rate of around \u00a5177 to the euro at the time of his presentation, compared with an even weaker level of approximately \u00a5185 a month earlier.<\/p>\n<\/a><\/p>\nSuch movements can alter the relative attractiveness of an imported product within a short period.<\/p>\nFor European producers, a stable euro price may still result in a significant price increase for a Japanese customer. Equally, a strengthening yen can improve purchasing conditions without any reduction in the exporter\u2019s price.<\/p>\nHayashi therefore treated currency movements as a continuing commercial variable, rather than background economic information.<\/p>\nEurope retains a major role in Japan\u2019s softwood supply<\/strong><\/p>\nJapan remains a substantial importer of softwood products, with Europe accounting for roughly half of the import volume discussed in the presentation.<\/p>\nHayashi put European softwood deliveries at around 2 million m\u00b3 a year, within a total imported softwood volume of approximately 4 million m\u00b3.<\/p>\n<\/a><\/p>\nFinland and Sweden dominate European supply, together accounting for more than 70% of the European total cited.<\/p>\n<\/a><\/p>\nThe trade covers several different product groups and end uses.<\/p>\nEuropean lamina is used in the manufacture of glued laminated products. Other supplies serve Japanese post-and-beam construction and the dimension-lumber market associated with two-by-four housing.<\/p>\nSpecies and specifications vary by application. European redwood and whitewood do not compete in precisely the same way across all products, and their exposure to substitution by Japanese species also differs.<\/p>\n<\/a><\/p>\nThis means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. 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Timber Industry News","isPartOf":{"@id":"https:\/\/www.timberindustrynews.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"thumbnailUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","datePublished":"2026-11-02T08:23:36+00:00","dateModified":"2026-11-02T21:39:51+00:00","inLanguage":"ro-RO","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/"]}]},{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","width":1536,"height":1024,"caption":"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade"},{"@type":"WebSite","@id":"https:\/\/www.timberindustrynews.com\/#website","url":"https:\/\/www.timberindustrynews.com\/","name":"\u0218tiri din industria lemnului","description":"","publisher":{"@id":"https:\/\/www.timberindustrynews.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.timberindustrynews.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"ro-RO"},{"@type":"Organization","@id":"https:\/\/www.timberindustrynews.com\/#organization","name":"\u0218tiri din industria lemnului","url":"https:\/\/www.timberindustrynews.com\/","logo":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","width":150,"height":57,"caption":"Timber Industry News"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/person\/135a1ae8119d1d1755135add5b7287ff","name":"GWMI Admin","image":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","caption":"GWMI Admin"}}]}},"_links":{"self":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/comments?post=100471"}],"version-history":[{"count":1,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions"}],"predecessor-version":[{"id":100473,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions\/100473"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media\/100472"}],"wp:attachment":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media?parent=100471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/categories?post=100471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/tags?post=100471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}](\"https:\/\/www.globalwoodmarketsinfo.com\/wp-content\/uploads\/2026\/11\/Anti-Koskinen.png\"){kind=link}
![<\/a><\/p>\nSpecies composition also limits the extent to which different Russian regions can substitute for European supply. The north-west has a forest composition more familiar to Nordic buyers, while pine and larch become more prominent further east, particularly in Siberia and the Far East.<\/p>\nConsequently, even if trade conditions were to change, the large forest resources of eastern Russia would not automatically provide a replacement for every spruce product used in Europe.<\/p>\nThe export downturn began before the invasion<\/strong><\/p>\nKoskinen traced the development of Russia\u2019s modern sawmilling industry through two distinct phases.<\/p>\nAt the beginning of the century, investment was concentrated heavily in the north-west. Nordic and Central European companies were among those building or acquiring sawmills, with much of the resulting production directed towards European customers.<\/p>\nAfter the global financial crisis, the focus shifted increasingly towards China. Weak demand in Europe coincided with Russian measures restricting log exports, encouraging more processing within Russia and a greater flow of sawn timber to Chinese buyers.<\/p>\nThe expansion was rapid. During the subsequent growth period, Russian lumber exports increased at close to 10% a year, according to Koskinen\u2019s account.<\/p>\nThat development also created a major concentration risk. A growing share of the industry depended on a single market whose demand was closely connected to construction and property development.<\/p>\nFor this reason, Koskinen argued that the crisis in Russian sawmilling did not begin with the invasion of Ukraine. The downturn had already started as China\u2019s property market weakened.<\/p>\nRussian softwood lumber exports peaked at approximately 31 million m\u00b3 in 2019. In the more recent period discussed in the presentation, they had fallen to around 14 million m\u00b3.<\/p>\n<\/a><\/p>\n <\/p>\nThe contraction combined two large losses: the reduction in Chinese demand and the subsequent loss of the European market. Koskinen estimated that the Chinese downturn had removed roughly 8 million to 10 million m\u00b3 of business, while the loss of European customers accounted for more than 5 million m\u00b3.<\/p>\nThose volumes have proved difficult to replace.<\/p>\n<\/a><\/p>\nA limited customer base weighs on realised prices<\/strong><\/p>\nRussia\u2019s remaining export business is concentrated heavily on China and a group of former Soviet markets, including countries such as Kazakhstan and Azerbaijan.<\/p>\n<\/a><\/p>\nThat narrower market mix affects both negotiating power and average revenue.<\/p>\nKoskinen\u2019s price comparisons indicated that Japan and some Middle Eastern and North African destinations offered better returns than much of the remaining export portfolio. However, these markets do not absorb enough volume to compensate for the concentration in lower-priced destinations.<\/p>\n<\/a><\/p>\nHe also cautioned that average prices need to be interpreted alongside product quality. Russian shipments to China include products that are not directly comparable with the kiln-dried, graded material typically supplied by Nordic exporters. Green material, squares and lower grades all influence the average.<\/p>\n<\/a><\/p>\nEven allowing for those differences, his assessment was that Russia\u2019s overall sales mix leaves producers with insufficient revenue to sustain healthy margins.<\/p>\nThe problem is therefore larger than a reduction in export volume. Mills have lost customers, shifted towards a narrower selection of destinations and received weaker average returns on the material they continue to sell.<\/a><\/p>\n<\/a><\/p>\nProduction statistics provide an incomplete picture<\/strong><\/p>\nKoskinen questioned how accurately official Russian production statistics describe the condition of the industry.<\/p>\nReported production has fallen much less sharply than exports. Taken at face value, the figures would imply a very large increase in domestic consumption.<\/p>\nHe considered that interpretation doubtful.<\/p>\n<\/a><\/p>\n<\/a><\/p>\nOne difficulty is the relationship between historical production and export figures. In some years, the reported export volume was close to the officially recorded production total, leaving little apparent room for domestic consumption.<\/p>\nFor Koskinen, this inconsistency limits the usefulness of a simple calculation in which exports are deducted from production to estimate the Russian market.<\/p>\nTrade data reported by importing countries provide a more reliable indication of developments in export activity. Since Russia no longer publishes the same level of export detail, these partner-country statistics have become particularly important.<\/p>\nRegional production patterns also reveal differences within the industry. The north-west had recovered part of its earlier decline in the official figures shown, while Siberia and the Far East remained under more pronounced pressure.<\/p>\nThose eastern regions have traditionally supplied China, making them particularly exposed to the contraction in Chinese demand.<\/p>\nDomestic construction offers some support<\/strong><\/p>\nThe domestic market was one of the few comparatively positive elements in Koskinen\u2019s presentation.<\/p>\nRussian construction activity has provided support to timber consumption, with growth in several residential and non-residential indicators during the period he examined.<\/p>\n<\/a><\/p>\nHowever, he did not regard this as sufficient evidence that domestic timber demand had expanded to the extent implied by the official production and export figures.<\/p>\nHis assessment was that larger sawmills, historically organised around export customers, are increasingly having to sell within Russia.<\/p>\nThat changes the structure of the domestic market. Smaller local mills traditionally supplied much of this business, while larger modern operations concentrated on exports.<\/p>\nAs export opportunities diminish, those larger producers must compete more actively for domestic customers. This may provide an outlet for part of their output, but it does not necessarily replace the prices, specifications or commercial relationships available in their former export markets.<\/p>\n<\/a><\/p>\n<\/a><\/p>\nCurrency, financing and logistics compound the pressure<\/strong><\/p>\nRecent trade developments offered little evidence of a sustained recovery.<\/p>\nIn the year-to-date figures cited by Koskinen, Russian shipments to China were down by nearly 17%, while deliveries to Japan had fallen by approximately 24%. The precise reporting periods will need to be read alongside the presentation charts.<\/p>\n<\/a><\/p>\nBeyond demand, producers face several additional constraints.<\/p>\nA stronger rouble reduces the domestic-currency proceeds of export sales. High financing costs make it difficult to invest, refinance or carry working capital. Transport restrictions and competing demands for rail capacity complicate deliveries to distant customers.<\/p>\nRail access is especially important for shipments to China. Yet the forest products industry does not necessarily receive priority when transport capacity is allocated.<\/p>\n<\/a><\/p>\nFor mills in the north-west, the loss of established European routes has also made the logistics of reaching alternative customers more difficult.<\/p>\nThese costs accumulate along the supply chain. A producer may retain access to a buyer but still face a much weaker commercial outcome once transport, financing and currency effects are included.<\/p>\n<\/a><\/p>\nMaintenance problems threaten the productive asset base<\/strong><\/p>\nKoskinen devoted particular attention to the industry\u2019s dependence on Western machinery.<\/p>\nModern Russian forestry and sawmilling operations were built partly around imported harvesting equipment, processing lines, spare parts and technical services.<\/p>\nRestricted access to those inputs creates difficulties that cannot always be resolved by finding a new supplier for an individual component.<\/p>\nSome equipment and parts continue to reach Russia through third countries or manufacturing locations outside Europe. Producers have also turned towards domestic equipment and Chinese machinery.<\/p>\nHowever, Koskinen said these alternatives do not always provide equivalent productivity or performance.<\/p>\nThe result is a gradual deterioration in the technical condition of parts of the industry. Weak profitability reduces the money available for maintenance, while procurement restrictions make maintenance harder even where funds are available.<\/p>\nThis creates a longer-term problem. A recovery in orders would not necessarily allow every mill to return immediately to its former production level or operating efficiency.<\/p>\nFinancial results show the scale of the damage<\/strong><\/p>\nThe company results presented by Koskinen indicated a substantial decline in revenue and widespread operating losses among the businesses examined.<\/p>\nSeveral mills reported deeply negative margins, with some losses reaching double-digit percentages of turnover.<\/p>\nHe also distinguished between assets previously developed and operated by Western companies and other Russian-owned operations.<\/p>\nThe former Western assets appeared, in his comparison, to have retained a stronger relative position. Their location, equipment and earlier operating standards may have helped them withstand the deterioration in market conditions.<\/p>\nNevertheless, this was a comparison within a struggling industry. Better relative performance did not mean that the underlying commercial environment was favourable.<\/p>\nJob cuts, financial distress and bankruptcies were already part of the adjustment.<\/p>\nEurope has adapted, but product markets differ<\/strong><\/p>\nKoskinen\u2019s assessment was that Europe has managed without Russian softwood lumber.<\/p>\nThe loss of that supply did not create a continuing shortage across the European softwood market. Weak construction demand and adjustments elsewhere in the supply chain have allowed the market to function without a return to its former Russian trade flows.<\/p>\n<\/a><\/p>\nHe contrasted this with birch plywood, where Russia previously supplied a much larger share of European requirements.<\/p>\nThe plywood market has different production constraints and fewer readily available substitutes. Restricted supply has therefore had a different effect on prices and profitability.<\/p>\n<\/a><\/p>\nHis comparison cautioned against applying the experience of one wood product to another. Russia\u2019s importance varies considerably by product, and the commercial consequences of losing its supply differ accordingly.<\/p>\nFor Russian sawmilling, however, the outlook remained difficult. Koskinen saw little prospect of Chinese demand quickly returning to its former peak, while the timing and conditions of any renewed European access remained uncertain.<\/p>\n<\/a><\/p>\nDomestic construction provides some support, but the industry continues to face lower export volumes, a weaker market mix, poor profitability and growing problems maintaining its assets.<\/p>\n<\/h4>\nHiroki Hayashi, Sumitomo Forestry Europe: Japan- European timber remains necessary, but competition is becoming harder<\/em><\/h4>\n<\/a>Hiroki Hayashi<\/figcaption><\/figure>\nHiroki Hayashi approached Japan\u2019s timber market from both a trading and a housing perspective.<\/p>\nSumitomo Forestry\u2019s activities span timber procurement, housebuilding and property-related businesses in Japan and overseas. That combination provided the basis for a presentation linking imported softwood demand to housing affordability, construction methods and competition from domestic species.<\/p>\nHis central assessment was that Japan remains an important market for European suppliers, but growth cannot be assumed within its traditional residential business.<\/p>\nHousing starts face long-term demographic pressure. The weak yen raises the cost of imports. Japanese species have become more competitive in applications where they can meet the required specifications.<\/p>\nAt the same time, non-residential timber construction offers opportunities that are still relatively underdeveloped.<\/p>\nDemographics constrain the housing market<\/strong><\/p>\nJapan\u2019s population is both ageing and declining.<\/p>\nHayashi cited a population of around 123 million, with approximately 30% aged 65 or above. These trends have direct consequences for household formation and the number of new homes required.<\/p>\n<\/a><\/p>\nHis presentation used a housing-start level of roughly 740,000 units as a reference point and discussed scenarios involving further declines.<\/p>\nThe pressures extend beyond population. Higher building costs, affordability constraints and changes in the housing market also affect demand.<\/p>\nWooden housing nevertheless retains a strong position within the total. Hayashi put its share at around 55\u201360% of housing units, supported by an established network of builders, component manufacturers and suppliers.<\/p>\n<\/a><\/p>\nThis provides a substantial base for timber consumption. However, a stable share within a declining housing market does not guarantee stable volumes.<\/p>\nEuropean suppliers therefore face a market in which timber can remain a preferred construction material while the total number of projects falls.<\/p>\nAffordability is weakening despite relatively low mortgage rates<\/strong><\/p>\nHayashi examined the widening gap between household incomes and housing costs.<\/p>\nSalary growth has been limited over a long period, while the cost of land and construction has increased. The pressure is particularly visible in large urban markets.<\/p>\n<\/a><\/p>\nHe pointed to strong apartment-price increases in Tokyo, where land costs, construction expenses and concentrated demand have pushed prices upwards.<\/p>\nDetached housing has, in some cases, remained relatively more accessible. Developers and housebuilders have helped control the total purchase price by reducing plot sizes and adjusting the housing offer.<\/p>\nFinancing conditions are another source of pressure.<\/p>\nJapanese mortgage rates remain relatively low compared with those in many other countries, but their direction matters. A gradual increase adds to the cost of buying a home at a time when construction and land are already expensive.<\/p>\n<\/a><\/p>\nHayashi noted that variable-rate mortgages account for a large share of the market. Changes in financing costs therefore influence purchasing decisions even when the absolute interest rate appears modest by international standards.<\/p>\nThe yen directly affects imported timber\u2019s competitiveness<\/strong><\/p>\nExchange rates are central to the relationship between Japanese buyers and European suppliers.<\/p>\nA weaker yen increases the local-currency cost of imported timber, making it harder for importers to compete against domestic material or pass higher costs through to customers.<\/p>\nHayashi cited an exchange rate of around \u00a5177 to the euro at the time of his presentation, compared with an even weaker level of approximately \u00a5185 a month earlier.<\/p>\n<\/a><\/p>\nSuch movements can alter the relative attractiveness of an imported product within a short period.<\/p>\nFor European producers, a stable euro price may still result in a significant price increase for a Japanese customer. Equally, a strengthening yen can improve purchasing conditions without any reduction in the exporter\u2019s price.<\/p>\nHayashi therefore treated currency movements as a continuing commercial variable, rather than background economic information.<\/p>\nEurope retains a major role in Japan\u2019s softwood supply<\/strong><\/p>\nJapan remains a substantial importer of softwood products, with Europe accounting for roughly half of the import volume discussed in the presentation.<\/p>\nHayashi put European softwood deliveries at around 2 million m\u00b3 a year, within a total imported softwood volume of approximately 4 million m\u00b3.<\/p>\n<\/a><\/p>\nFinland and Sweden dominate European supply, together accounting for more than 70% of the European total cited.<\/p>\n<\/a><\/p>\nThe trade covers several different product groups and end uses.<\/p>\nEuropean lamina is used in the manufacture of glued laminated products. Other supplies serve Japanese post-and-beam construction and the dimension-lumber market associated with two-by-four housing.<\/p>\nSpecies and specifications vary by application. European redwood and whitewood do not compete in precisely the same way across all products, and their exposure to substitution by Japanese species also differs.<\/p>\n<\/a><\/p>\nThis means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. 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![<\/a><\/p>\n <\/p>\nThe contraction combined two large losses: the reduction in Chinese demand and the subsequent loss of the European market. Koskinen estimated that the Chinese downturn had removed roughly 8 million to 10 million m\u00b3 of business, while the loss of European customers accounted for more than 5 million m\u00b3.<\/p>\nThose volumes have proved difficult to replace.<\/p>\n<\/a><\/p>\nA limited customer base weighs on realised prices<\/strong><\/p>\nRussia\u2019s remaining export business is concentrated heavily on China and a group of former Soviet markets, including countries such as Kazakhstan and Azerbaijan.<\/p>\n<\/a><\/p>\nThat narrower market mix affects both negotiating power and average revenue.<\/p>\nKoskinen\u2019s price comparisons indicated that Japan and some Middle Eastern and North African destinations offered better returns than much of the remaining export portfolio. However, these markets do not absorb enough volume to compensate for the concentration in lower-priced destinations.<\/p>\n<\/a><\/p>\nHe also cautioned that average prices need to be interpreted alongside product quality. Russian shipments to China include products that are not directly comparable with the kiln-dried, graded material typically supplied by Nordic exporters. Green material, squares and lower grades all influence the average.<\/p>\n<\/a><\/p>\nEven allowing for those differences, his assessment was that Russia\u2019s overall sales mix leaves producers with insufficient revenue to sustain healthy margins.<\/p>\nThe problem is therefore larger than a reduction in export volume. Mills have lost customers, shifted towards a narrower selection of destinations and received weaker average returns on the material they continue to sell.<\/a><\/p>\n<\/a><\/p>\nProduction statistics provide an incomplete picture<\/strong><\/p>\nKoskinen questioned how accurately official Russian production statistics describe the condition of the industry.<\/p>\nReported production has fallen much less sharply than exports. Taken at face value, the figures would imply a very large increase in domestic consumption.<\/p>\nHe considered that interpretation doubtful.<\/p>\n<\/a><\/p>\n<\/a><\/p>\nOne difficulty is the relationship between historical production and export figures. In some years, the reported export volume was close to the officially recorded production total, leaving little apparent room for domestic consumption.<\/p>\nFor Koskinen, this inconsistency limits the usefulness of a simple calculation in which exports are deducted from production to estimate the Russian market.<\/p>\nTrade data reported by importing countries provide a more reliable indication of developments in export activity. Since Russia no longer publishes the same level of export detail, these partner-country statistics have become particularly important.<\/p>\nRegional production patterns also reveal differences within the industry. The north-west had recovered part of its earlier decline in the official figures shown, while Siberia and the Far East remained under more pronounced pressure.<\/p>\nThose eastern regions have traditionally supplied China, making them particularly exposed to the contraction in Chinese demand.<\/p>\nDomestic construction offers some support<\/strong><\/p>\nThe domestic market was one of the few comparatively positive elements in Koskinen\u2019s presentation.<\/p>\nRussian construction activity has provided support to timber consumption, with growth in several residential and non-residential indicators during the period he examined.<\/p>\n<\/a><\/p>\nHowever, he did not regard this as sufficient evidence that domestic timber demand had expanded to the extent implied by the official production and export figures.<\/p>\nHis assessment was that larger sawmills, historically organised around export customers, are increasingly having to sell within Russia.<\/p>\nThat changes the structure of the domestic market. Smaller local mills traditionally supplied much of this business, while larger modern operations concentrated on exports.<\/p>\nAs export opportunities diminish, those larger producers must compete more actively for domestic customers. This may provide an outlet for part of their output, but it does not necessarily replace the prices, specifications or commercial relationships available in their former export markets.<\/p>\n<\/a><\/p>\n<\/a><\/p>\nCurrency, financing and logistics compound the pressure<\/strong><\/p>\nRecent trade developments offered little evidence of a sustained recovery.<\/p>\nIn the year-to-date figures cited by Koskinen, Russian shipments to China were down by nearly 17%, while deliveries to Japan had fallen by approximately 24%. The precise reporting periods will need to be read alongside the presentation charts.<\/p>\n<\/a><\/p>\nBeyond demand, producers face several additional constraints.<\/p>\nA stronger rouble reduces the domestic-currency proceeds of export sales. High financing costs make it difficult to invest, refinance or carry working capital. Transport restrictions and competing demands for rail capacity complicate deliveries to distant customers.<\/p>\nRail access is especially important for shipments to China. Yet the forest products industry does not necessarily receive priority when transport capacity is allocated.<\/p>\n<\/a><\/p>\nFor mills in the north-west, the loss of established European routes has also made the logistics of reaching alternative customers more difficult.<\/p>\nThese costs accumulate along the supply chain. A producer may retain access to a buyer but still face a much weaker commercial outcome once transport, financing and currency effects are included.<\/p>\n<\/a><\/p>\nMaintenance problems threaten the productive asset base<\/strong><\/p>\nKoskinen devoted particular attention to the industry\u2019s dependence on Western machinery.<\/p>\nModern Russian forestry and sawmilling operations were built partly around imported harvesting equipment, processing lines, spare parts and technical services.<\/p>\nRestricted access to those inputs creates difficulties that cannot always be resolved by finding a new supplier for an individual component.<\/p>\nSome equipment and parts continue to reach Russia through third countries or manufacturing locations outside Europe. Producers have also turned towards domestic equipment and Chinese machinery.<\/p>\nHowever, Koskinen said these alternatives do not always provide equivalent productivity or performance.<\/p>\nThe result is a gradual deterioration in the technical condition of parts of the industry. Weak profitability reduces the money available for maintenance, while procurement restrictions make maintenance harder even where funds are available.<\/p>\nThis creates a longer-term problem. A recovery in orders would not necessarily allow every mill to return immediately to its former production level or operating efficiency.<\/p>\nFinancial results show the scale of the damage<\/strong><\/p>\nThe company results presented by Koskinen indicated a substantial decline in revenue and widespread operating losses among the businesses examined.<\/p>\nSeveral mills reported deeply negative margins, with some losses reaching double-digit percentages of turnover.<\/p>\nHe also distinguished between assets previously developed and operated by Western companies and other Russian-owned operations.<\/p>\nThe former Western assets appeared, in his comparison, to have retained a stronger relative position. Their location, equipment and earlier operating standards may have helped them withstand the deterioration in market conditions.<\/p>\nNevertheless, this was a comparison within a struggling industry. Better relative performance did not mean that the underlying commercial environment was favourable.<\/p>\nJob cuts, financial distress and bankruptcies were already part of the adjustment.<\/p>\nEurope has adapted, but product markets differ<\/strong><\/p>\nKoskinen\u2019s assessment was that Europe has managed without Russian softwood lumber.<\/p>\nThe loss of that supply did not create a continuing shortage across the European softwood market. Weak construction demand and adjustments elsewhere in the supply chain have allowed the market to function without a return to its former Russian trade flows.<\/p>\n<\/a><\/p>\nHe contrasted this with birch plywood, where Russia previously supplied a much larger share of European requirements.<\/p>\nThe plywood market has different production constraints and fewer readily available substitutes. Restricted supply has therefore had a different effect on prices and profitability.<\/p>\n<\/a><\/p>\nHis comparison cautioned against applying the experience of one wood product to another. Russia\u2019s importance varies considerably by product, and the commercial consequences of losing its supply differ accordingly.<\/p>\nFor Russian sawmilling, however, the outlook remained difficult. Koskinen saw little prospect of Chinese demand quickly returning to its former peak, while the timing and conditions of any renewed European access remained uncertain.<\/p>\n<\/a><\/p>\nDomestic construction provides some support, but the industry continues to face lower export volumes, a weaker market mix, poor profitability and growing problems maintaining its assets.<\/p>\n<\/h4>\nHiroki Hayashi, Sumitomo Forestry Europe: Japan- European timber remains necessary, but competition is becoming harder<\/em><\/h4>\n<\/a>Hiroki Hayashi<\/figcaption><\/figure>\nHiroki Hayashi approached Japan\u2019s timber market from both a trading and a housing perspective.<\/p>\nSumitomo Forestry\u2019s activities span timber procurement, housebuilding and property-related businesses in Japan and overseas. That combination provided the basis for a presentation linking imported softwood demand to housing affordability, construction methods and competition from domestic species.<\/p>\nHis central assessment was that Japan remains an important market for European suppliers, but growth cannot be assumed within its traditional residential business.<\/p>\nHousing starts face long-term demographic pressure. The weak yen raises the cost of imports. Japanese species have become more competitive in applications where they can meet the required specifications.<\/p>\nAt the same time, non-residential timber construction offers opportunities that are still relatively underdeveloped.<\/p>\nDemographics constrain the housing market<\/strong><\/p>\nJapan\u2019s population is both ageing and declining.<\/p>\nHayashi cited a population of around 123 million, with approximately 30% aged 65 or above. These trends have direct consequences for household formation and the number of new homes required.<\/p>\n<\/a><\/p>\nHis presentation used a housing-start level of roughly 740,000 units as a reference point and discussed scenarios involving further declines.<\/p>\nThe pressures extend beyond population. Higher building costs, affordability constraints and changes in the housing market also affect demand.<\/p>\nWooden housing nevertheless retains a strong position within the total. Hayashi put its share at around 55\u201360% of housing units, supported by an established network of builders, component manufacturers and suppliers.<\/p>\n<\/a><\/p>\nThis provides a substantial base for timber consumption. However, a stable share within a declining housing market does not guarantee stable volumes.<\/p>\nEuropean suppliers therefore face a market in which timber can remain a preferred construction material while the total number of projects falls.<\/p>\nAffordability is weakening despite relatively low mortgage rates<\/strong><\/p>\nHayashi examined the widening gap between household incomes and housing costs.<\/p>\nSalary growth has been limited over a long period, while the cost of land and construction has increased. The pressure is particularly visible in large urban markets.<\/p>\n<\/a><\/p>\nHe pointed to strong apartment-price increases in Tokyo, where land costs, construction expenses and concentrated demand have pushed prices upwards.<\/p>\nDetached housing has, in some cases, remained relatively more accessible. Developers and housebuilders have helped control the total purchase price by reducing plot sizes and adjusting the housing offer.<\/p>\nFinancing conditions are another source of pressure.<\/p>\nJapanese mortgage rates remain relatively low compared with those in many other countries, but their direction matters. A gradual increase adds to the cost of buying a home at a time when construction and land are already expensive.<\/p>\n<\/a><\/p>\nHayashi noted that variable-rate mortgages account for a large share of the market. Changes in financing costs therefore influence purchasing decisions even when the absolute interest rate appears modest by international standards.<\/p>\nThe yen directly affects imported timber\u2019s competitiveness<\/strong><\/p>\nExchange rates are central to the relationship between Japanese buyers and European suppliers.<\/p>\nA weaker yen increases the local-currency cost of imported timber, making it harder for importers to compete against domestic material or pass higher costs through to customers.<\/p>\nHayashi cited an exchange rate of around \u00a5177 to the euro at the time of his presentation, compared with an even weaker level of approximately \u00a5185 a month earlier.<\/p>\n<\/a><\/p>\nSuch movements can alter the relative attractiveness of an imported product within a short period.<\/p>\nFor European producers, a stable euro price may still result in a significant price increase for a Japanese customer. Equally, a strengthening yen can improve purchasing conditions without any reduction in the exporter\u2019s price.<\/p>\nHayashi therefore treated currency movements as a continuing commercial variable, rather than background economic information.<\/p>\nEurope retains a major role in Japan\u2019s softwood supply<\/strong><\/p>\nJapan remains a substantial importer of softwood products, with Europe accounting for roughly half of the import volume discussed in the presentation.<\/p>\nHayashi put European softwood deliveries at around 2 million m\u00b3 a year, within a total imported softwood volume of approximately 4 million m\u00b3.<\/p>\n<\/a><\/p>\nFinland and Sweden dominate European supply, together accounting for more than 70% of the European total cited.<\/p>\n<\/a><\/p>\nThe trade covers several different product groups and end uses.<\/p>\nEuropean lamina is used in the manufacture of glued laminated products. Other supplies serve Japanese post-and-beam construction and the dimension-lumber market associated with two-by-four housing.<\/p>\nSpecies and specifications vary by application. European redwood and whitewood do not compete in precisely the same way across all products, and their exposure to substitution by Japanese species also differs.<\/p>\n<\/a><\/p>\nThis means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. 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![<\/a><\/p>\nA limited customer base weighs on realised prices<\/strong><\/p>\nRussia\u2019s remaining export business is concentrated heavily on China and a group of former Soviet markets, including countries such as Kazakhstan and Azerbaijan.<\/p>\n<\/a><\/p>\nThat narrower market mix affects both negotiating power and average revenue.<\/p>\nKoskinen\u2019s price comparisons indicated that Japan and some Middle Eastern and North African destinations offered better returns than much of the remaining export portfolio. However, these markets do not absorb enough volume to compensate for the concentration in lower-priced destinations.<\/p>\n<\/a><\/p>\nHe also cautioned that average prices need to be interpreted alongside product quality. Russian shipments to China include products that are not directly comparable with the kiln-dried, graded material typically supplied by Nordic exporters. Green material, squares and lower grades all influence the average.<\/p>\n<\/a><\/p>\nEven allowing for those differences, his assessment was that Russia\u2019s overall sales mix leaves producers with insufficient revenue to sustain healthy margins.<\/p>\nThe problem is therefore larger than a reduction in export volume. Mills have lost customers, shifted towards a narrower selection of destinations and received weaker average returns on the material they continue to sell.<\/a><\/p>\n<\/a><\/p>\nProduction statistics provide an incomplete picture<\/strong><\/p>\nKoskinen questioned how accurately official Russian production statistics describe the condition of the industry.<\/p>\nReported production has fallen much less sharply than exports. Taken at face value, the figures would imply a very large increase in domestic consumption.<\/p>\nHe considered that interpretation doubtful.<\/p>\n<\/a><\/p>\n<\/a><\/p>\nOne difficulty is the relationship between historical production and export figures. In some years, the reported export volume was close to the officially recorded production total, leaving little apparent room for domestic consumption.<\/p>\nFor Koskinen, this inconsistency limits the usefulness of a simple calculation in which exports are deducted from production to estimate the Russian market.<\/p>\nTrade data reported by importing countries provide a more reliable indication of developments in export activity. Since Russia no longer publishes the same level of export detail, these partner-country statistics have become particularly important.<\/p>\nRegional production patterns also reveal differences within the industry. The north-west had recovered part of its earlier decline in the official figures shown, while Siberia and the Far East remained under more pronounced pressure.<\/p>\nThose eastern regions have traditionally supplied China, making them particularly exposed to the contraction in Chinese demand.<\/p>\nDomestic construction offers some support<\/strong><\/p>\nThe domestic market was one of the few comparatively positive elements in Koskinen\u2019s presentation.<\/p>\nRussian construction activity has provided support to timber consumption, with growth in several residential and non-residential indicators during the period he examined.<\/p>\n<\/a><\/p>\nHowever, he did not regard this as sufficient evidence that domestic timber demand had expanded to the extent implied by the official production and export figures.<\/p>\nHis assessment was that larger sawmills, historically organised around export customers, are increasingly having to sell within Russia.<\/p>\nThat changes the structure of the domestic market. Smaller local mills traditionally supplied much of this business, while larger modern operations concentrated on exports.<\/p>\nAs export opportunities diminish, those larger producers must compete more actively for domestic customers. This may provide an outlet for part of their output, but it does not necessarily replace the prices, specifications or commercial relationships available in their former export markets.<\/p>\n<\/a><\/p>\n<\/a><\/p>\nCurrency, financing and logistics compound the pressure<\/strong><\/p>\nRecent trade developments offered little evidence of a sustained recovery.<\/p>\nIn the year-to-date figures cited by Koskinen, Russian shipments to China were down by nearly 17%, while deliveries to Japan had fallen by approximately 24%. The precise reporting periods will need to be read alongside the presentation charts.<\/p>\n<\/a><\/p>\nBeyond demand, producers face several additional constraints.<\/p>\nA stronger rouble reduces the domestic-currency proceeds of export sales. High financing costs make it difficult to invest, refinance or carry working capital. Transport restrictions and competing demands for rail capacity complicate deliveries to distant customers.<\/p>\nRail access is especially important for shipments to China. Yet the forest products industry does not necessarily receive priority when transport capacity is allocated.<\/p>\n<\/a><\/p>\nFor mills in the north-west, the loss of established European routes has also made the logistics of reaching alternative customers more difficult.<\/p>\nThese costs accumulate along the supply chain. A producer may retain access to a buyer but still face a much weaker commercial outcome once transport, financing and currency effects are included.<\/p>\n<\/a><\/p>\nMaintenance problems threaten the productive asset base<\/strong><\/p>\nKoskinen devoted particular attention to the industry\u2019s dependence on Western machinery.<\/p>\nModern Russian forestry and sawmilling operations were built partly around imported harvesting equipment, processing lines, spare parts and technical services.<\/p>\nRestricted access to those inputs creates difficulties that cannot always be resolved by finding a new supplier for an individual component.<\/p>\nSome equipment and parts continue to reach Russia through third countries or manufacturing locations outside Europe. Producers have also turned towards domestic equipment and Chinese machinery.<\/p>\nHowever, Koskinen said these alternatives do not always provide equivalent productivity or performance.<\/p>\nThe result is a gradual deterioration in the technical condition of parts of the industry. Weak profitability reduces the money available for maintenance, while procurement restrictions make maintenance harder even where funds are available.<\/p>\nThis creates a longer-term problem. A recovery in orders would not necessarily allow every mill to return immediately to its former production level or operating efficiency.<\/p>\nFinancial results show the scale of the damage<\/strong><\/p>\nThe company results presented by Koskinen indicated a substantial decline in revenue and widespread operating losses among the businesses examined.<\/p>\nSeveral mills reported deeply negative margins, with some losses reaching double-digit percentages of turnover.<\/p>\nHe also distinguished between assets previously developed and operated by Western companies and other Russian-owned operations.<\/p>\nThe former Western assets appeared, in his comparison, to have retained a stronger relative position. Their location, equipment and earlier operating standards may have helped them withstand the deterioration in market conditions.<\/p>\nNevertheless, this was a comparison within a struggling industry. Better relative performance did not mean that the underlying commercial environment was favourable.<\/p>\nJob cuts, financial distress and bankruptcies were already part of the adjustment.<\/p>\nEurope has adapted, but product markets differ<\/strong><\/p>\nKoskinen\u2019s assessment was that Europe has managed without Russian softwood lumber.<\/p>\nThe loss of that supply did not create a continuing shortage across the European softwood market. Weak construction demand and adjustments elsewhere in the supply chain have allowed the market to function without a return to its former Russian trade flows.<\/p>\n<\/a><\/p>\nHe contrasted this with birch plywood, where Russia previously supplied a much larger share of European requirements.<\/p>\nThe plywood market has different production constraints and fewer readily available substitutes. Restricted supply has therefore had a different effect on prices and profitability.<\/p>\n<\/a><\/p>\nHis comparison cautioned against applying the experience of one wood product to another. Russia\u2019s importance varies considerably by product, and the commercial consequences of losing its supply differ accordingly.<\/p>\nFor Russian sawmilling, however, the outlook remained difficult. Koskinen saw little prospect of Chinese demand quickly returning to its former peak, while the timing and conditions of any renewed European access remained uncertain.<\/p>\n<\/a><\/p>\nDomestic construction provides some support, but the industry continues to face lower export volumes, a weaker market mix, poor profitability and growing problems maintaining its assets.<\/p>\n<\/h4>\nHiroki Hayashi, Sumitomo Forestry Europe: Japan- European timber remains necessary, but competition is becoming harder<\/em><\/h4>\n<\/a>Hiroki Hayashi<\/figcaption><\/figure>\nHiroki Hayashi approached Japan\u2019s timber market from both a trading and a housing perspective.<\/p>\nSumitomo Forestry\u2019s activities span timber procurement, housebuilding and property-related businesses in Japan and overseas. That combination provided the basis for a presentation linking imported softwood demand to housing affordability, construction methods and competition from domestic species.<\/p>\nHis central assessment was that Japan remains an important market for European suppliers, but growth cannot be assumed within its traditional residential business.<\/p>\nHousing starts face long-term demographic pressure. The weak yen raises the cost of imports. Japanese species have become more competitive in applications where they can meet the required specifications.<\/p>\nAt the same time, non-residential timber construction offers opportunities that are still relatively underdeveloped.<\/p>\nDemographics constrain the housing market<\/strong><\/p>\nJapan\u2019s population is both ageing and declining.<\/p>\nHayashi cited a population of around 123 million, with approximately 30% aged 65 or above. These trends have direct consequences for household formation and the number of new homes required.<\/p>\n<\/a><\/p>\nHis presentation used a housing-start level of roughly 740,000 units as a reference point and discussed scenarios involving further declines.<\/p>\nThe pressures extend beyond population. Higher building costs, affordability constraints and changes in the housing market also affect demand.<\/p>\nWooden housing nevertheless retains a strong position within the total. Hayashi put its share at around 55\u201360% of housing units, supported by an established network of builders, component manufacturers and suppliers.<\/p>\n<\/a><\/p>\nThis provides a substantial base for timber consumption. However, a stable share within a declining housing market does not guarantee stable volumes.<\/p>\nEuropean suppliers therefore face a market in which timber can remain a preferred construction material while the total number of projects falls.<\/p>\nAffordability is weakening despite relatively low mortgage rates<\/strong><\/p>\nHayashi examined the widening gap between household incomes and housing costs.<\/p>\nSalary growth has been limited over a long period, while the cost of land and construction has increased. The pressure is particularly visible in large urban markets.<\/p>\n<\/a><\/p>\nHe pointed to strong apartment-price increases in Tokyo, where land costs, construction expenses and concentrated demand have pushed prices upwards.<\/p>\nDetached housing has, in some cases, remained relatively more accessible. Developers and housebuilders have helped control the total purchase price by reducing plot sizes and adjusting the housing offer.<\/p>\nFinancing conditions are another source of pressure.<\/p>\nJapanese mortgage rates remain relatively low compared with those in many other countries, but their direction matters. A gradual increase adds to the cost of buying a home at a time when construction and land are already expensive.<\/p>\n<\/a><\/p>\nHayashi noted that variable-rate mortgages account for a large share of the market. Changes in financing costs therefore influence purchasing decisions even when the absolute interest rate appears modest by international standards.<\/p>\nThe yen directly affects imported timber\u2019s competitiveness<\/strong><\/p>\nExchange rates are central to the relationship between Japanese buyers and European suppliers.<\/p>\nA weaker yen increases the local-currency cost of imported timber, making it harder for importers to compete against domestic material or pass higher costs through to customers.<\/p>\nHayashi cited an exchange rate of around \u00a5177 to the euro at the time of his presentation, compared with an even weaker level of approximately \u00a5185 a month earlier.<\/p>\n<\/a><\/p>\nSuch movements can alter the relative attractiveness of an imported product within a short period.<\/p>\nFor European producers, a stable euro price may still result in a significant price increase for a Japanese customer. Equally, a strengthening yen can improve purchasing conditions without any reduction in the exporter\u2019s price.<\/p>\nHayashi therefore treated currency movements as a continuing commercial variable, rather than background economic information.<\/p>\nEurope retains a major role in Japan\u2019s softwood supply<\/strong><\/p>\nJapan remains a substantial importer of softwood products, with Europe accounting for roughly half of the import volume discussed in the presentation.<\/p>\nHayashi put European softwood deliveries at around 2 million m\u00b3 a year, within a total imported softwood volume of approximately 4 million m\u00b3.<\/p>\n<\/a><\/p>\nFinland and Sweden dominate European supply, together accounting for more than 70% of the European total cited.<\/p>\n<\/a><\/p>\nThe trade covers several different product groups and end uses.<\/p>\nEuropean lamina is used in the manufacture of glued laminated products. Other supplies serve Japanese post-and-beam construction and the dimension-lumber market associated with two-by-four housing.<\/p>\nSpecies and specifications vary by application. European redwood and whitewood do not compete in precisely the same way across all products, and their exposure to substitution by Japanese species also differs.<\/p>\n<\/a><\/p>\nThis means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. 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Timber Industry News","isPartOf":{"@id":"https:\/\/www.timberindustrynews.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"thumbnailUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","datePublished":"2026-11-02T08:23:36+00:00","dateModified":"2026-11-02T21:39:51+00:00","inLanguage":"ro-RO","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/"]}]},{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","width":1536,"height":1024,"caption":"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade"},{"@type":"WebSite","@id":"https:\/\/www.timberindustrynews.com\/#website","url":"https:\/\/www.timberindustrynews.com\/","name":"\u0218tiri din industria lemnului","description":"","publisher":{"@id":"https:\/\/www.timberindustrynews.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.timberindustrynews.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"ro-RO"},{"@type":"Organization","@id":"https:\/\/www.timberindustrynews.com\/#organization","name":"\u0218tiri din industria lemnului","url":"https:\/\/www.timberindustrynews.com\/","logo":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","width":150,"height":57,"caption":"Timber Industry News"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/person\/135a1ae8119d1d1755135add5b7287ff","name":"GWMI Admin","image":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","caption":"GWMI Admin"}}]}},"_links":{"self":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/comments?post=100471"}],"version-history":[{"count":1,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions"}],"predecessor-version":[{"id":100473,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions\/100473"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media\/100472"}],"wp:attachment":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media?parent=100471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/categories?post=100471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/tags?post=100471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}](\"https:\/\/www.globalwoodmarketsinfo.com\/wp-content\/uploads\/2026\/11\/03_softwood_exporters_2025.jpg\"){kind=link}
![<\/a><\/p>\nThat narrower market mix affects both negotiating power and average revenue.<\/p>\nKoskinen\u2019s price comparisons indicated that Japan and some Middle Eastern and North African destinations offered better returns than much of the remaining export portfolio. However, these markets do not absorb enough volume to compensate for the concentration in lower-priced destinations.<\/p>\n<\/a><\/p>\nHe also cautioned that average prices need to be interpreted alongside product quality. Russian shipments to China include products that are not directly comparable with the kiln-dried, graded material typically supplied by Nordic exporters. Green material, squares and lower grades all influence the average.<\/p>\n<\/a><\/p>\nEven allowing for those differences, his assessment was that Russia\u2019s overall sales mix leaves producers with insufficient revenue to sustain healthy margins.<\/p>\nThe problem is therefore larger than a reduction in export volume. Mills have lost customers, shifted towards a narrower selection of destinations and received weaker average returns on the material they continue to sell.<\/a><\/p>\n<\/a><\/p>\nProduction statistics provide an incomplete picture<\/strong><\/p>\nKoskinen questioned how accurately official Russian production statistics describe the condition of the industry.<\/p>\nReported production has fallen much less sharply than exports. Taken at face value, the figures would imply a very large increase in domestic consumption.<\/p>\nHe considered that interpretation doubtful.<\/p>\n<\/a><\/p>\n<\/a><\/p>\nOne difficulty is the relationship between historical production and export figures. In some years, the reported export volume was close to the officially recorded production total, leaving little apparent room for domestic consumption.<\/p>\nFor Koskinen, this inconsistency limits the usefulness of a simple calculation in which exports are deducted from production to estimate the Russian market.<\/p>\nTrade data reported by importing countries provide a more reliable indication of developments in export activity. Since Russia no longer publishes the same level of export detail, these partner-country statistics have become particularly important.<\/p>\nRegional production patterns also reveal differences within the industry. The north-west had recovered part of its earlier decline in the official figures shown, while Siberia and the Far East remained under more pronounced pressure.<\/p>\nThose eastern regions have traditionally supplied China, making them particularly exposed to the contraction in Chinese demand.<\/p>\nDomestic construction offers some support<\/strong><\/p>\nThe domestic market was one of the few comparatively positive elements in Koskinen\u2019s presentation.<\/p>\nRussian construction activity has provided support to timber consumption, with growth in several residential and non-residential indicators during the period he examined.<\/p>\n<\/a><\/p>\nHowever, he did not regard this as sufficient evidence that domestic timber demand had expanded to the extent implied by the official production and export figures.<\/p>\nHis assessment was that larger sawmills, historically organised around export customers, are increasingly having to sell within Russia.<\/p>\nThat changes the structure of the domestic market. Smaller local mills traditionally supplied much of this business, while larger modern operations concentrated on exports.<\/p>\nAs export opportunities diminish, those larger producers must compete more actively for domestic customers. This may provide an outlet for part of their output, but it does not necessarily replace the prices, specifications or commercial relationships available in their former export markets.<\/p>\n<\/a><\/p>\n<\/a><\/p>\nCurrency, financing and logistics compound the pressure<\/strong><\/p>\nRecent trade developments offered little evidence of a sustained recovery.<\/p>\nIn the year-to-date figures cited by Koskinen, Russian shipments to China were down by nearly 17%, while deliveries to Japan had fallen by approximately 24%. The precise reporting periods will need to be read alongside the presentation charts.<\/p>\n<\/a><\/p>\nBeyond demand, producers face several additional constraints.<\/p>\nA stronger rouble reduces the domestic-currency proceeds of export sales. High financing costs make it difficult to invest, refinance or carry working capital. Transport restrictions and competing demands for rail capacity complicate deliveries to distant customers.<\/p>\nRail access is especially important for shipments to China. Yet the forest products industry does not necessarily receive priority when transport capacity is allocated.<\/p>\n<\/a><\/p>\nFor mills in the north-west, the loss of established European routes has also made the logistics of reaching alternative customers more difficult.<\/p>\nThese costs accumulate along the supply chain. A producer may retain access to a buyer but still face a much weaker commercial outcome once transport, financing and currency effects are included.<\/p>\n<\/a><\/p>\nMaintenance problems threaten the productive asset base<\/strong><\/p>\nKoskinen devoted particular attention to the industry\u2019s dependence on Western machinery.<\/p>\nModern Russian forestry and sawmilling operations were built partly around imported harvesting equipment, processing lines, spare parts and technical services.<\/p>\nRestricted access to those inputs creates difficulties that cannot always be resolved by finding a new supplier for an individual component.<\/p>\nSome equipment and parts continue to reach Russia through third countries or manufacturing locations outside Europe. Producers have also turned towards domestic equipment and Chinese machinery.<\/p>\nHowever, Koskinen said these alternatives do not always provide equivalent productivity or performance.<\/p>\nThe result is a gradual deterioration in the technical condition of parts of the industry. Weak profitability reduces the money available for maintenance, while procurement restrictions make maintenance harder even where funds are available.<\/p>\nThis creates a longer-term problem. A recovery in orders would not necessarily allow every mill to return immediately to its former production level or operating efficiency.<\/p>\nFinancial results show the scale of the damage<\/strong><\/p>\nThe company results presented by Koskinen indicated a substantial decline in revenue and widespread operating losses among the businesses examined.<\/p>\nSeveral mills reported deeply negative margins, with some losses reaching double-digit percentages of turnover.<\/p>\nHe also distinguished between assets previously developed and operated by Western companies and other Russian-owned operations.<\/p>\nThe former Western assets appeared, in his comparison, to have retained a stronger relative position. Their location, equipment and earlier operating standards may have helped them withstand the deterioration in market conditions.<\/p>\nNevertheless, this was a comparison within a struggling industry. Better relative performance did not mean that the underlying commercial environment was favourable.<\/p>\nJob cuts, financial distress and bankruptcies were already part of the adjustment.<\/p>\nEurope has adapted, but product markets differ<\/strong><\/p>\nKoskinen\u2019s assessment was that Europe has managed without Russian softwood lumber.<\/p>\nThe loss of that supply did not create a continuing shortage across the European softwood market. Weak construction demand and adjustments elsewhere in the supply chain have allowed the market to function without a return to its former Russian trade flows.<\/p>\n<\/a><\/p>\nHe contrasted this with birch plywood, where Russia previously supplied a much larger share of European requirements.<\/p>\nThe plywood market has different production constraints and fewer readily available substitutes. Restricted supply has therefore had a different effect on prices and profitability.<\/p>\n<\/a><\/p>\nHis comparison cautioned against applying the experience of one wood product to another. Russia\u2019s importance varies considerably by product, and the commercial consequences of losing its supply differ accordingly.<\/p>\nFor Russian sawmilling, however, the outlook remained difficult. Koskinen saw little prospect of Chinese demand quickly returning to its former peak, while the timing and conditions of any renewed European access remained uncertain.<\/p>\n<\/a><\/p>\nDomestic construction provides some support, but the industry continues to face lower export volumes, a weaker market mix, poor profitability and growing problems maintaining its assets.<\/p>\n<\/h4>\nHiroki Hayashi, Sumitomo Forestry Europe: Japan- European timber remains necessary, but competition is becoming harder<\/em><\/h4>\n<\/a>Hiroki Hayashi<\/figcaption><\/figure>\nHiroki Hayashi approached Japan\u2019s timber market from both a trading and a housing perspective.<\/p>\nSumitomo Forestry\u2019s activities span timber procurement, housebuilding and property-related businesses in Japan and overseas. That combination provided the basis for a presentation linking imported softwood demand to housing affordability, construction methods and competition from domestic species.<\/p>\nHis central assessment was that Japan remains an important market for European suppliers, but growth cannot be assumed within its traditional residential business.<\/p>\nHousing starts face long-term demographic pressure. The weak yen raises the cost of imports. Japanese species have become more competitive in applications where they can meet the required specifications.<\/p>\nAt the same time, non-residential timber construction offers opportunities that are still relatively underdeveloped.<\/p>\nDemographics constrain the housing market<\/strong><\/p>\nJapan\u2019s population is both ageing and declining.<\/p>\nHayashi cited a population of around 123 million, with approximately 30% aged 65 or above. These trends have direct consequences for household formation and the number of new homes required.<\/p>\n<\/a><\/p>\nHis presentation used a housing-start level of roughly 740,000 units as a reference point and discussed scenarios involving further declines.<\/p>\nThe pressures extend beyond population. Higher building costs, affordability constraints and changes in the housing market also affect demand.<\/p>\nWooden housing nevertheless retains a strong position within the total. Hayashi put its share at around 55\u201360% of housing units, supported by an established network of builders, component manufacturers and suppliers.<\/p>\n<\/a><\/p>\nThis provides a substantial base for timber consumption. However, a stable share within a declining housing market does not guarantee stable volumes.<\/p>\nEuropean suppliers therefore face a market in which timber can remain a preferred construction material while the total number of projects falls.<\/p>\nAffordability is weakening despite relatively low mortgage rates<\/strong><\/p>\nHayashi examined the widening gap between household incomes and housing costs.<\/p>\nSalary growth has been limited over a long period, while the cost of land and construction has increased. The pressure is particularly visible in large urban markets.<\/p>\n<\/a><\/p>\nHe pointed to strong apartment-price increases in Tokyo, where land costs, construction expenses and concentrated demand have pushed prices upwards.<\/p>\nDetached housing has, in some cases, remained relatively more accessible. Developers and housebuilders have helped control the total purchase price by reducing plot sizes and adjusting the housing offer.<\/p>\nFinancing conditions are another source of pressure.<\/p>\nJapanese mortgage rates remain relatively low compared with those in many other countries, but their direction matters. A gradual increase adds to the cost of buying a home at a time when construction and land are already expensive.<\/p>\n<\/a><\/p>\nHayashi noted that variable-rate mortgages account for a large share of the market. Changes in financing costs therefore influence purchasing decisions even when the absolute interest rate appears modest by international standards.<\/p>\nThe yen directly affects imported timber\u2019s competitiveness<\/strong><\/p>\nExchange rates are central to the relationship between Japanese buyers and European suppliers.<\/p>\nA weaker yen increases the local-currency cost of imported timber, making it harder for importers to compete against domestic material or pass higher costs through to customers.<\/p>\nHayashi cited an exchange rate of around \u00a5177 to the euro at the time of his presentation, compared with an even weaker level of approximately \u00a5185 a month earlier.<\/p>\n<\/a><\/p>\nSuch movements can alter the relative attractiveness of an imported product within a short period.<\/p>\nFor European producers, a stable euro price may still result in a significant price increase for a Japanese customer. Equally, a strengthening yen can improve purchasing conditions without any reduction in the exporter\u2019s price.<\/p>\nHayashi therefore treated currency movements as a continuing commercial variable, rather than background economic information.<\/p>\nEurope retains a major role in Japan\u2019s softwood supply<\/strong><\/p>\nJapan remains a substantial importer of softwood products, with Europe accounting for roughly half of the import volume discussed in the presentation.<\/p>\nHayashi put European softwood deliveries at around 2 million m\u00b3 a year, within a total imported softwood volume of approximately 4 million m\u00b3.<\/p>\n<\/a><\/p>\nFinland and Sweden dominate European supply, together accounting for more than 70% of the European total cited.<\/p>\n<\/a><\/p>\nThe trade covers several different product groups and end uses.<\/p>\nEuropean lamina is used in the manufacture of glued laminated products. Other supplies serve Japanese post-and-beam construction and the dimension-lumber market associated with two-by-four housing.<\/p>\nSpecies and specifications vary by application. European redwood and whitewood do not compete in precisely the same way across all products, and their exposure to substitution by Japanese species also differs.<\/p>\n<\/a><\/p>\nThis means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. 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![<\/a><\/p>\nHe also cautioned that average prices need to be interpreted alongside product quality. Russian shipments to China include products that are not directly comparable with the kiln-dried, graded material typically supplied by Nordic exporters. Green material, squares and lower grades all influence the average.<\/p>\n<\/a><\/p>\nEven allowing for those differences, his assessment was that Russia\u2019s overall sales mix leaves producers with insufficient revenue to sustain healthy margins.<\/p>\nThe problem is therefore larger than a reduction in export volume. Mills have lost customers, shifted towards a narrower selection of destinations and received weaker average returns on the material they continue to sell.<\/a><\/p>\n<\/a><\/p>\nProduction statistics provide an incomplete picture<\/strong><\/p>\nKoskinen questioned how accurately official Russian production statistics describe the condition of the industry.<\/p>\nReported production has fallen much less sharply than exports. Taken at face value, the figures would imply a very large increase in domestic consumption.<\/p>\nHe considered that interpretation doubtful.<\/p>\n<\/a><\/p>\n<\/a><\/p>\nOne difficulty is the relationship between historical production and export figures. In some years, the reported export volume was close to the officially recorded production total, leaving little apparent room for domestic consumption.<\/p>\nFor Koskinen, this inconsistency limits the usefulness of a simple calculation in which exports are deducted from production to estimate the Russian market.<\/p>\nTrade data reported by importing countries provide a more reliable indication of developments in export activity. Since Russia no longer publishes the same level of export detail, these partner-country statistics have become particularly important.<\/p>\nRegional production patterns also reveal differences within the industry. The north-west had recovered part of its earlier decline in the official figures shown, while Siberia and the Far East remained under more pronounced pressure.<\/p>\nThose eastern regions have traditionally supplied China, making them particularly exposed to the contraction in Chinese demand.<\/p>\nDomestic construction offers some support<\/strong><\/p>\nThe domestic market was one of the few comparatively positive elements in Koskinen\u2019s presentation.<\/p>\nRussian construction activity has provided support to timber consumption, with growth in several residential and non-residential indicators during the period he examined.<\/p>\n<\/a><\/p>\nHowever, he did not regard this as sufficient evidence that domestic timber demand had expanded to the extent implied by the official production and export figures.<\/p>\nHis assessment was that larger sawmills, historically organised around export customers, are increasingly having to sell within Russia.<\/p>\nThat changes the structure of the domestic market. Smaller local mills traditionally supplied much of this business, while larger modern operations concentrated on exports.<\/p>\nAs export opportunities diminish, those larger producers must compete more actively for domestic customers. This may provide an outlet for part of their output, but it does not necessarily replace the prices, specifications or commercial relationships available in their former export markets.<\/p>\n<\/a><\/p>\n<\/a><\/p>\nCurrency, financing and logistics compound the pressure<\/strong><\/p>\nRecent trade developments offered little evidence of a sustained recovery.<\/p>\nIn the year-to-date figures cited by Koskinen, Russian shipments to China were down by nearly 17%, while deliveries to Japan had fallen by approximately 24%. The precise reporting periods will need to be read alongside the presentation charts.<\/p>\n<\/a><\/p>\nBeyond demand, producers face several additional constraints.<\/p>\nA stronger rouble reduces the domestic-currency proceeds of export sales. High financing costs make it difficult to invest, refinance or carry working capital. Transport restrictions and competing demands for rail capacity complicate deliveries to distant customers.<\/p>\nRail access is especially important for shipments to China. Yet the forest products industry does not necessarily receive priority when transport capacity is allocated.<\/p>\n<\/a><\/p>\nFor mills in the north-west, the loss of established European routes has also made the logistics of reaching alternative customers more difficult.<\/p>\nThese costs accumulate along the supply chain. A producer may retain access to a buyer but still face a much weaker commercial outcome once transport, financing and currency effects are included.<\/p>\n<\/a><\/p>\nMaintenance problems threaten the productive asset base<\/strong><\/p>\nKoskinen devoted particular attention to the industry\u2019s dependence on Western machinery.<\/p>\nModern Russian forestry and sawmilling operations were built partly around imported harvesting equipment, processing lines, spare parts and technical services.<\/p>\nRestricted access to those inputs creates difficulties that cannot always be resolved by finding a new supplier for an individual component.<\/p>\nSome equipment and parts continue to reach Russia through third countries or manufacturing locations outside Europe. Producers have also turned towards domestic equipment and Chinese machinery.<\/p>\nHowever, Koskinen said these alternatives do not always provide equivalent productivity or performance.<\/p>\nThe result is a gradual deterioration in the technical condition of parts of the industry. Weak profitability reduces the money available for maintenance, while procurement restrictions make maintenance harder even where funds are available.<\/p>\nThis creates a longer-term problem. A recovery in orders would not necessarily allow every mill to return immediately to its former production level or operating efficiency.<\/p>\nFinancial results show the scale of the damage<\/strong><\/p>\nThe company results presented by Koskinen indicated a substantial decline in revenue and widespread operating losses among the businesses examined.<\/p>\nSeveral mills reported deeply negative margins, with some losses reaching double-digit percentages of turnover.<\/p>\nHe also distinguished between assets previously developed and operated by Western companies and other Russian-owned operations.<\/p>\nThe former Western assets appeared, in his comparison, to have retained a stronger relative position. Their location, equipment and earlier operating standards may have helped them withstand the deterioration in market conditions.<\/p>\nNevertheless, this was a comparison within a struggling industry. Better relative performance did not mean that the underlying commercial environment was favourable.<\/p>\nJob cuts, financial distress and bankruptcies were already part of the adjustment.<\/p>\nEurope has adapted, but product markets differ<\/strong><\/p>\nKoskinen\u2019s assessment was that Europe has managed without Russian softwood lumber.<\/p>\nThe loss of that supply did not create a continuing shortage across the European softwood market. Weak construction demand and adjustments elsewhere in the supply chain have allowed the market to function without a return to its former Russian trade flows.<\/p>\n<\/a><\/p>\nHe contrasted this with birch plywood, where Russia previously supplied a much larger share of European requirements.<\/p>\nThe plywood market has different production constraints and fewer readily available substitutes. Restricted supply has therefore had a different effect on prices and profitability.<\/p>\n<\/a><\/p>\nHis comparison cautioned against applying the experience of one wood product to another. Russia\u2019s importance varies considerably by product, and the commercial consequences of losing its supply differ accordingly.<\/p>\nFor Russian sawmilling, however, the outlook remained difficult. Koskinen saw little prospect of Chinese demand quickly returning to its former peak, while the timing and conditions of any renewed European access remained uncertain.<\/p>\n<\/a><\/p>\nDomestic construction provides some support, but the industry continues to face lower export volumes, a weaker market mix, poor profitability and growing problems maintaining its assets.<\/p>\n<\/h4>\nHiroki Hayashi, Sumitomo Forestry Europe: Japan- European timber remains necessary, but competition is becoming harder<\/em><\/h4>\n<\/a>Hiroki Hayashi<\/figcaption><\/figure>\nHiroki Hayashi approached Japan\u2019s timber market from both a trading and a housing perspective.<\/p>\nSumitomo Forestry\u2019s activities span timber procurement, housebuilding and property-related businesses in Japan and overseas. That combination provided the basis for a presentation linking imported softwood demand to housing affordability, construction methods and competition from domestic species.<\/p>\nHis central assessment was that Japan remains an important market for European suppliers, but growth cannot be assumed within its traditional residential business.<\/p>\nHousing starts face long-term demographic pressure. The weak yen raises the cost of imports. Japanese species have become more competitive in applications where they can meet the required specifications.<\/p>\nAt the same time, non-residential timber construction offers opportunities that are still relatively underdeveloped.<\/p>\nDemographics constrain the housing market<\/strong><\/p>\nJapan\u2019s population is both ageing and declining.<\/p>\nHayashi cited a population of around 123 million, with approximately 30% aged 65 or above. These trends have direct consequences for household formation and the number of new homes required.<\/p>\n<\/a><\/p>\nHis presentation used a housing-start level of roughly 740,000 units as a reference point and discussed scenarios involving further declines.<\/p>\nThe pressures extend beyond population. Higher building costs, affordability constraints and changes in the housing market also affect demand.<\/p>\nWooden housing nevertheless retains a strong position within the total. Hayashi put its share at around 55\u201360% of housing units, supported by an established network of builders, component manufacturers and suppliers.<\/p>\n<\/a><\/p>\nThis provides a substantial base for timber consumption. However, a stable share within a declining housing market does not guarantee stable volumes.<\/p>\nEuropean suppliers therefore face a market in which timber can remain a preferred construction material while the total number of projects falls.<\/p>\nAffordability is weakening despite relatively low mortgage rates<\/strong><\/p>\nHayashi examined the widening gap between household incomes and housing costs.<\/p>\nSalary growth has been limited over a long period, while the cost of land and construction has increased. The pressure is particularly visible in large urban markets.<\/p>\n<\/a><\/p>\nHe pointed to strong apartment-price increases in Tokyo, where land costs, construction expenses and concentrated demand have pushed prices upwards.<\/p>\nDetached housing has, in some cases, remained relatively more accessible. Developers and housebuilders have helped control the total purchase price by reducing plot sizes and adjusting the housing offer.<\/p>\nFinancing conditions are another source of pressure.<\/p>\nJapanese mortgage rates remain relatively low compared with those in many other countries, but their direction matters. A gradual increase adds to the cost of buying a home at a time when construction and land are already expensive.<\/p>\n<\/a><\/p>\nHayashi noted that variable-rate mortgages account for a large share of the market. Changes in financing costs therefore influence purchasing decisions even when the absolute interest rate appears modest by international standards.<\/p>\nThe yen directly affects imported timber\u2019s competitiveness<\/strong><\/p>\nExchange rates are central to the relationship between Japanese buyers and European suppliers.<\/p>\nA weaker yen increases the local-currency cost of imported timber, making it harder for importers to compete against domestic material or pass higher costs through to customers.<\/p>\nHayashi cited an exchange rate of around \u00a5177 to the euro at the time of his presentation, compared with an even weaker level of approximately \u00a5185 a month earlier.<\/p>\n<\/a><\/p>\nSuch movements can alter the relative attractiveness of an imported product within a short period.<\/p>\nFor European producers, a stable euro price may still result in a significant price increase for a Japanese customer. Equally, a strengthening yen can improve purchasing conditions without any reduction in the exporter\u2019s price.<\/p>\nHayashi therefore treated currency movements as a continuing commercial variable, rather than background economic information.<\/p>\nEurope retains a major role in Japan\u2019s softwood supply<\/strong><\/p>\nJapan remains a substantial importer of softwood products, with Europe accounting for roughly half of the import volume discussed in the presentation.<\/p>\nHayashi put European softwood deliveries at around 2 million m\u00b3 a year, within a total imported softwood volume of approximately 4 million m\u00b3.<\/p>\n<\/a><\/p>\nFinland and Sweden dominate European supply, together accounting for more than 70% of the European total cited.<\/p>\n<\/a><\/p>\nThe trade covers several different product groups and end uses.<\/p>\nEuropean lamina is used in the manufacture of glued laminated products. Other supplies serve Japanese post-and-beam construction and the dimension-lumber market associated with two-by-four housing.<\/p>\nSpecies and specifications vary by application. European redwood and whitewood do not compete in precisely the same way across all products, and their exposure to substitution by Japanese species also differs.<\/p>\n<\/a><\/p>\nThis means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. 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Timber Industry News","isPartOf":{"@id":"https:\/\/www.timberindustrynews.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"thumbnailUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","datePublished":"2026-11-02T08:23:36+00:00","dateModified":"2026-11-02T21:39:51+00:00","inLanguage":"ro-RO","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/"]}]},{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","width":1536,"height":1024,"caption":"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade"},{"@type":"WebSite","@id":"https:\/\/www.timberindustrynews.com\/#website","url":"https:\/\/www.timberindustrynews.com\/","name":"\u0218tiri din industria lemnului","description":"","publisher":{"@id":"https:\/\/www.timberindustrynews.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.timberindustrynews.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"ro-RO"},{"@type":"Organization","@id":"https:\/\/www.timberindustrynews.com\/#organization","name":"\u0218tiri din industria lemnului","url":"https:\/\/www.timberindustrynews.com\/","logo":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","width":150,"height":57,"caption":"Timber Industry News"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/person\/135a1ae8119d1d1755135add5b7287ff","name":"GWMI Admin","image":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","caption":"GWMI Admin"}}]}},"_links":{"self":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/comments?post=100471"}],"version-history":[{"count":1,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions"}],"predecessor-version":[{"id":100473,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions\/100473"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media\/100472"}],"wp:attachment":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media?parent=100471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/categories?post=100471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/tags?post=100471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}](\"https:\/\/www.globalwoodmarketsinfo.com\/wp-content\/uploads\/2026\/11\/07_global_import_price_comparison.jpg\"){kind=link}
![<\/a><\/p>\nEven allowing for those differences, his assessment was that Russia\u2019s overall sales mix leaves producers with insufficient revenue to sustain healthy margins.<\/p>\nThe problem is therefore larger than a reduction in export volume. Mills have lost customers, shifted towards a narrower selection of destinations and received weaker average returns on the material they continue to sell.<\/a><\/p>\n<\/a><\/p>\nProduction statistics provide an incomplete picture<\/strong><\/p>\nKoskinen questioned how accurately official Russian production statistics describe the condition of the industry.<\/p>\nReported production has fallen much less sharply than exports. Taken at face value, the figures would imply a very large increase in domestic consumption.<\/p>\nHe considered that interpretation doubtful.<\/p>\n<\/a><\/p>\n<\/a><\/p>\nOne difficulty is the relationship between historical production and export figures. In some years, the reported export volume was close to the officially recorded production total, leaving little apparent room for domestic consumption.<\/p>\nFor Koskinen, this inconsistency limits the usefulness of a simple calculation in which exports are deducted from production to estimate the Russian market.<\/p>\nTrade data reported by importing countries provide a more reliable indication of developments in export activity. Since Russia no longer publishes the same level of export detail, these partner-country statistics have become particularly important.<\/p>\nRegional production patterns also reveal differences within the industry. The north-west had recovered part of its earlier decline in the official figures shown, while Siberia and the Far East remained under more pronounced pressure.<\/p>\nThose eastern regions have traditionally supplied China, making them particularly exposed to the contraction in Chinese demand.<\/p>\nDomestic construction offers some support<\/strong><\/p>\nThe domestic market was one of the few comparatively positive elements in Koskinen\u2019s presentation.<\/p>\nRussian construction activity has provided support to timber consumption, with growth in several residential and non-residential indicators during the period he examined.<\/p>\n<\/a><\/p>\nHowever, he did not regard this as sufficient evidence that domestic timber demand had expanded to the extent implied by the official production and export figures.<\/p>\nHis assessment was that larger sawmills, historically organised around export customers, are increasingly having to sell within Russia.<\/p>\nThat changes the structure of the domestic market. Smaller local mills traditionally supplied much of this business, while larger modern operations concentrated on exports.<\/p>\nAs export opportunities diminish, those larger producers must compete more actively for domestic customers. This may provide an outlet for part of their output, but it does not necessarily replace the prices, specifications or commercial relationships available in their former export markets.<\/p>\n<\/a><\/p>\n<\/a><\/p>\nCurrency, financing and logistics compound the pressure<\/strong><\/p>\nRecent trade developments offered little evidence of a sustained recovery.<\/p>\nIn the year-to-date figures cited by Koskinen, Russian shipments to China were down by nearly 17%, while deliveries to Japan had fallen by approximately 24%. The precise reporting periods will need to be read alongside the presentation charts.<\/p>\n<\/a><\/p>\nBeyond demand, producers face several additional constraints.<\/p>\nA stronger rouble reduces the domestic-currency proceeds of export sales. High financing costs make it difficult to invest, refinance or carry working capital. Transport restrictions and competing demands for rail capacity complicate deliveries to distant customers.<\/p>\nRail access is especially important for shipments to China. Yet the forest products industry does not necessarily receive priority when transport capacity is allocated.<\/p>\n<\/a><\/p>\nFor mills in the north-west, the loss of established European routes has also made the logistics of reaching alternative customers more difficult.<\/p>\nThese costs accumulate along the supply chain. A producer may retain access to a buyer but still face a much weaker commercial outcome once transport, financing and currency effects are included.<\/p>\n<\/a><\/p>\nMaintenance problems threaten the productive asset base<\/strong><\/p>\nKoskinen devoted particular attention to the industry\u2019s dependence on Western machinery.<\/p>\nModern Russian forestry and sawmilling operations were built partly around imported harvesting equipment, processing lines, spare parts and technical services.<\/p>\nRestricted access to those inputs creates difficulties that cannot always be resolved by finding a new supplier for an individual component.<\/p>\nSome equipment and parts continue to reach Russia through third countries or manufacturing locations outside Europe. Producers have also turned towards domestic equipment and Chinese machinery.<\/p>\nHowever, Koskinen said these alternatives do not always provide equivalent productivity or performance.<\/p>\nThe result is a gradual deterioration in the technical condition of parts of the industry. Weak profitability reduces the money available for maintenance, while procurement restrictions make maintenance harder even where funds are available.<\/p>\nThis creates a longer-term problem. A recovery in orders would not necessarily allow every mill to return immediately to its former production level or operating efficiency.<\/p>\nFinancial results show the scale of the damage<\/strong><\/p>\nThe company results presented by Koskinen indicated a substantial decline in revenue and widespread operating losses among the businesses examined.<\/p>\nSeveral mills reported deeply negative margins, with some losses reaching double-digit percentages of turnover.<\/p>\nHe also distinguished between assets previously developed and operated by Western companies and other Russian-owned operations.<\/p>\nThe former Western assets appeared, in his comparison, to have retained a stronger relative position. Their location, equipment and earlier operating standards may have helped them withstand the deterioration in market conditions.<\/p>\nNevertheless, this was a comparison within a struggling industry. Better relative performance did not mean that the underlying commercial environment was favourable.<\/p>\nJob cuts, financial distress and bankruptcies were already part of the adjustment.<\/p>\nEurope has adapted, but product markets differ<\/strong><\/p>\nKoskinen\u2019s assessment was that Europe has managed without Russian softwood lumber.<\/p>\nThe loss of that supply did not create a continuing shortage across the European softwood market. Weak construction demand and adjustments elsewhere in the supply chain have allowed the market to function without a return to its former Russian trade flows.<\/p>\n<\/a><\/p>\nHe contrasted this with birch plywood, where Russia previously supplied a much larger share of European requirements.<\/p>\nThe plywood market has different production constraints and fewer readily available substitutes. Restricted supply has therefore had a different effect on prices and profitability.<\/p>\n<\/a><\/p>\nHis comparison cautioned against applying the experience of one wood product to another. Russia\u2019s importance varies considerably by product, and the commercial consequences of losing its supply differ accordingly.<\/p>\nFor Russian sawmilling, however, the outlook remained difficult. Koskinen saw little prospect of Chinese demand quickly returning to its former peak, while the timing and conditions of any renewed European access remained uncertain.<\/p>\n<\/a><\/p>\nDomestic construction provides some support, but the industry continues to face lower export volumes, a weaker market mix, poor profitability and growing problems maintaining its assets.<\/p>\n<\/h4>\nHiroki Hayashi, Sumitomo Forestry Europe: Japan- European timber remains necessary, but competition is becoming harder<\/em><\/h4>\n<\/a>Hiroki Hayashi<\/figcaption><\/figure>\nHiroki Hayashi approached Japan\u2019s timber market from both a trading and a housing perspective.<\/p>\nSumitomo Forestry\u2019s activities span timber procurement, housebuilding and property-related businesses in Japan and overseas. That combination provided the basis for a presentation linking imported softwood demand to housing affordability, construction methods and competition from domestic species.<\/p>\nHis central assessment was that Japan remains an important market for European suppliers, but growth cannot be assumed within its traditional residential business.<\/p>\nHousing starts face long-term demographic pressure. The weak yen raises the cost of imports. Japanese species have become more competitive in applications where they can meet the required specifications.<\/p>\nAt the same time, non-residential timber construction offers opportunities that are still relatively underdeveloped.<\/p>\nDemographics constrain the housing market<\/strong><\/p>\nJapan\u2019s population is both ageing and declining.<\/p>\nHayashi cited a population of around 123 million, with approximately 30% aged 65 or above. These trends have direct consequences for household formation and the number of new homes required.<\/p>\n<\/a><\/p>\nHis presentation used a housing-start level of roughly 740,000 units as a reference point and discussed scenarios involving further declines.<\/p>\nThe pressures extend beyond population. Higher building costs, affordability constraints and changes in the housing market also affect demand.<\/p>\nWooden housing nevertheless retains a strong position within the total. Hayashi put its share at around 55\u201360% of housing units, supported by an established network of builders, component manufacturers and suppliers.<\/p>\n<\/a><\/p>\nThis provides a substantial base for timber consumption. However, a stable share within a declining housing market does not guarantee stable volumes.<\/p>\nEuropean suppliers therefore face a market in which timber can remain a preferred construction material while the total number of projects falls.<\/p>\nAffordability is weakening despite relatively low mortgage rates<\/strong><\/p>\nHayashi examined the widening gap between household incomes and housing costs.<\/p>\nSalary growth has been limited over a long period, while the cost of land and construction has increased. The pressure is particularly visible in large urban markets.<\/p>\n<\/a><\/p>\nHe pointed to strong apartment-price increases in Tokyo, where land costs, construction expenses and concentrated demand have pushed prices upwards.<\/p>\nDetached housing has, in some cases, remained relatively more accessible. Developers and housebuilders have helped control the total purchase price by reducing plot sizes and adjusting the housing offer.<\/p>\nFinancing conditions are another source of pressure.<\/p>\nJapanese mortgage rates remain relatively low compared with those in many other countries, but their direction matters. A gradual increase adds to the cost of buying a home at a time when construction and land are already expensive.<\/p>\n<\/a><\/p>\nHayashi noted that variable-rate mortgages account for a large share of the market. Changes in financing costs therefore influence purchasing decisions even when the absolute interest rate appears modest by international standards.<\/p>\nThe yen directly affects imported timber\u2019s competitiveness<\/strong><\/p>\nExchange rates are central to the relationship between Japanese buyers and European suppliers.<\/p>\nA weaker yen increases the local-currency cost of imported timber, making it harder for importers to compete against domestic material or pass higher costs through to customers.<\/p>\nHayashi cited an exchange rate of around \u00a5177 to the euro at the time of his presentation, compared with an even weaker level of approximately \u00a5185 a month earlier.<\/p>\n<\/a><\/p>\nSuch movements can alter the relative attractiveness of an imported product within a short period.<\/p>\nFor European producers, a stable euro price may still result in a significant price increase for a Japanese customer. Equally, a strengthening yen can improve purchasing conditions without any reduction in the exporter\u2019s price.<\/p>\nHayashi therefore treated currency movements as a continuing commercial variable, rather than background economic information.<\/p>\nEurope retains a major role in Japan\u2019s softwood supply<\/strong><\/p>\nJapan remains a substantial importer of softwood products, with Europe accounting for roughly half of the import volume discussed in the presentation.<\/p>\nHayashi put European softwood deliveries at around 2 million m\u00b3 a year, within a total imported softwood volume of approximately 4 million m\u00b3.<\/p>\n<\/a><\/p>\nFinland and Sweden dominate European supply, together accounting for more than 70% of the European total cited.<\/p>\n<\/a><\/p>\nThe trade covers several different product groups and end uses.<\/p>\nEuropean lamina is used in the manufacture of glued laminated products. Other supplies serve Japanese post-and-beam construction and the dimension-lumber market associated with two-by-four housing.<\/p>\nSpecies and specifications vary by application. European redwood and whitewood do not compete in precisely the same way across all products, and their exposure to substitution by Japanese species also differs.<\/p>\n<\/a><\/p>\nThis means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. 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![<\/a><\/p>\n<\/a><\/p>\nProduction statistics provide an incomplete picture<\/strong><\/p>\nKoskinen questioned how accurately official Russian production statistics describe the condition of the industry.<\/p>\nReported production has fallen much less sharply than exports. Taken at face value, the figures would imply a very large increase in domestic consumption.<\/p>\nHe considered that interpretation doubtful.<\/p>\n<\/a><\/p>\n<\/a><\/p>\nOne difficulty is the relationship between historical production and export figures. In some years, the reported export volume was close to the officially recorded production total, leaving little apparent room for domestic consumption.<\/p>\nFor Koskinen, this inconsistency limits the usefulness of a simple calculation in which exports are deducted from production to estimate the Russian market.<\/p>\nTrade data reported by importing countries provide a more reliable indication of developments in export activity. Since Russia no longer publishes the same level of export detail, these partner-country statistics have become particularly important.<\/p>\nRegional production patterns also reveal differences within the industry. The north-west had recovered part of its earlier decline in the official figures shown, while Siberia and the Far East remained under more pronounced pressure.<\/p>\nThose eastern regions have traditionally supplied China, making them particularly exposed to the contraction in Chinese demand.<\/p>\nDomestic construction offers some support<\/strong><\/p>\nThe domestic market was one of the few comparatively positive elements in Koskinen\u2019s presentation.<\/p>\nRussian construction activity has provided support to timber consumption, with growth in several residential and non-residential indicators during the period he examined.<\/p>\n<\/a><\/p>\nHowever, he did not regard this as sufficient evidence that domestic timber demand had expanded to the extent implied by the official production and export figures.<\/p>\nHis assessment was that larger sawmills, historically organised around export customers, are increasingly having to sell within Russia.<\/p>\nThat changes the structure of the domestic market. Smaller local mills traditionally supplied much of this business, while larger modern operations concentrated on exports.<\/p>\nAs export opportunities diminish, those larger producers must compete more actively for domestic customers. This may provide an outlet for part of their output, but it does not necessarily replace the prices, specifications or commercial relationships available in their former export markets.<\/p>\n<\/a><\/p>\n<\/a><\/p>\nCurrency, financing and logistics compound the pressure<\/strong><\/p>\nRecent trade developments offered little evidence of a sustained recovery.<\/p>\nIn the year-to-date figures cited by Koskinen, Russian shipments to China were down by nearly 17%, while deliveries to Japan had fallen by approximately 24%. The precise reporting periods will need to be read alongside the presentation charts.<\/p>\n<\/a><\/p>\nBeyond demand, producers face several additional constraints.<\/p>\nA stronger rouble reduces the domestic-currency proceeds of export sales. High financing costs make it difficult to invest, refinance or carry working capital. Transport restrictions and competing demands for rail capacity complicate deliveries to distant customers.<\/p>\nRail access is especially important for shipments to China. Yet the forest products industry does not necessarily receive priority when transport capacity is allocated.<\/p>\n<\/a><\/p>\nFor mills in the north-west, the loss of established European routes has also made the logistics of reaching alternative customers more difficult.<\/p>\nThese costs accumulate along the supply chain. A producer may retain access to a buyer but still face a much weaker commercial outcome once transport, financing and currency effects are included.<\/p>\n<\/a><\/p>\nMaintenance problems threaten the productive asset base<\/strong><\/p>\nKoskinen devoted particular attention to the industry\u2019s dependence on Western machinery.<\/p>\nModern Russian forestry and sawmilling operations were built partly around imported harvesting equipment, processing lines, spare parts and technical services.<\/p>\nRestricted access to those inputs creates difficulties that cannot always be resolved by finding a new supplier for an individual component.<\/p>\nSome equipment and parts continue to reach Russia through third countries or manufacturing locations outside Europe. Producers have also turned towards domestic equipment and Chinese machinery.<\/p>\nHowever, Koskinen said these alternatives do not always provide equivalent productivity or performance.<\/p>\nThe result is a gradual deterioration in the technical condition of parts of the industry. Weak profitability reduces the money available for maintenance, while procurement restrictions make maintenance harder even where funds are available.<\/p>\nThis creates a longer-term problem. A recovery in orders would not necessarily allow every mill to return immediately to its former production level or operating efficiency.<\/p>\nFinancial results show the scale of the damage<\/strong><\/p>\nThe company results presented by Koskinen indicated a substantial decline in revenue and widespread operating losses among the businesses examined.<\/p>\nSeveral mills reported deeply negative margins, with some losses reaching double-digit percentages of turnover.<\/p>\nHe also distinguished between assets previously developed and operated by Western companies and other Russian-owned operations.<\/p>\nThe former Western assets appeared, in his comparison, to have retained a stronger relative position. Their location, equipment and earlier operating standards may have helped them withstand the deterioration in market conditions.<\/p>\nNevertheless, this was a comparison within a struggling industry. Better relative performance did not mean that the underlying commercial environment was favourable.<\/p>\nJob cuts, financial distress and bankruptcies were already part of the adjustment.<\/p>\nEurope has adapted, but product markets differ<\/strong><\/p>\nKoskinen\u2019s assessment was that Europe has managed without Russian softwood lumber.<\/p>\nThe loss of that supply did not create a continuing shortage across the European softwood market. Weak construction demand and adjustments elsewhere in the supply chain have allowed the market to function without a return to its former Russian trade flows.<\/p>\n<\/a><\/p>\nHe contrasted this with birch plywood, where Russia previously supplied a much larger share of European requirements.<\/p>\nThe plywood market has different production constraints and fewer readily available substitutes. Restricted supply has therefore had a different effect on prices and profitability.<\/p>\n<\/a><\/p>\nHis comparison cautioned against applying the experience of one wood product to another. Russia\u2019s importance varies considerably by product, and the commercial consequences of losing its supply differ accordingly.<\/p>\nFor Russian sawmilling, however, the outlook remained difficult. Koskinen saw little prospect of Chinese demand quickly returning to its former peak, while the timing and conditions of any renewed European access remained uncertain.<\/p>\n<\/a><\/p>\nDomestic construction provides some support, but the industry continues to face lower export volumes, a weaker market mix, poor profitability and growing problems maintaining its assets.<\/p>\n<\/h4>\nHiroki Hayashi, Sumitomo Forestry Europe: Japan- European timber remains necessary, but competition is becoming harder<\/em><\/h4>\n<\/a>Hiroki Hayashi<\/figcaption><\/figure>\nHiroki Hayashi approached Japan\u2019s timber market from both a trading and a housing perspective.<\/p>\nSumitomo Forestry\u2019s activities span timber procurement, housebuilding and property-related businesses in Japan and overseas. That combination provided the basis for a presentation linking imported softwood demand to housing affordability, construction methods and competition from domestic species.<\/p>\nHis central assessment was that Japan remains an important market for European suppliers, but growth cannot be assumed within its traditional residential business.<\/p>\nHousing starts face long-term demographic pressure. The weak yen raises the cost of imports. Japanese species have become more competitive in applications where they can meet the required specifications.<\/p>\nAt the same time, non-residential timber construction offers opportunities that are still relatively underdeveloped.<\/p>\nDemographics constrain the housing market<\/strong><\/p>\nJapan\u2019s population is both ageing and declining.<\/p>\nHayashi cited a population of around 123 million, with approximately 30% aged 65 or above. These trends have direct consequences for household formation and the number of new homes required.<\/p>\n<\/a><\/p>\nHis presentation used a housing-start level of roughly 740,000 units as a reference point and discussed scenarios involving further declines.<\/p>\nThe pressures extend beyond population. Higher building costs, affordability constraints and changes in the housing market also affect demand.<\/p>\nWooden housing nevertheless retains a strong position within the total. Hayashi put its share at around 55\u201360% of housing units, supported by an established network of builders, component manufacturers and suppliers.<\/p>\n<\/a><\/p>\nThis provides a substantial base for timber consumption. However, a stable share within a declining housing market does not guarantee stable volumes.<\/p>\nEuropean suppliers therefore face a market in which timber can remain a preferred construction material while the total number of projects falls.<\/p>\nAffordability is weakening despite relatively low mortgage rates<\/strong><\/p>\nHayashi examined the widening gap between household incomes and housing costs.<\/p>\nSalary growth has been limited over a long period, while the cost of land and construction has increased. The pressure is particularly visible in large urban markets.<\/p>\n<\/a><\/p>\nHe pointed to strong apartment-price increases in Tokyo, where land costs, construction expenses and concentrated demand have pushed prices upwards.<\/p>\nDetached housing has, in some cases, remained relatively more accessible. Developers and housebuilders have helped control the total purchase price by reducing plot sizes and adjusting the housing offer.<\/p>\nFinancing conditions are another source of pressure.<\/p>\nJapanese mortgage rates remain relatively low compared with those in many other countries, but their direction matters. A gradual increase adds to the cost of buying a home at a time when construction and land are already expensive.<\/p>\n<\/a><\/p>\nHayashi noted that variable-rate mortgages account for a large share of the market. Changes in financing costs therefore influence purchasing decisions even when the absolute interest rate appears modest by international standards.<\/p>\nThe yen directly affects imported timber\u2019s competitiveness<\/strong><\/p>\nExchange rates are central to the relationship between Japanese buyers and European suppliers.<\/p>\nA weaker yen increases the local-currency cost of imported timber, making it harder for importers to compete against domestic material or pass higher costs through to customers.<\/p>\nHayashi cited an exchange rate of around \u00a5177 to the euro at the time of his presentation, compared with an even weaker level of approximately \u00a5185 a month earlier.<\/p>\n<\/a><\/p>\nSuch movements can alter the relative attractiveness of an imported product within a short period.<\/p>\nFor European producers, a stable euro price may still result in a significant price increase for a Japanese customer. Equally, a strengthening yen can improve purchasing conditions without any reduction in the exporter\u2019s price.<\/p>\nHayashi therefore treated currency movements as a continuing commercial variable, rather than background economic information.<\/p>\nEurope retains a major role in Japan\u2019s softwood supply<\/strong><\/p>\nJapan remains a substantial importer of softwood products, with Europe accounting for roughly half of the import volume discussed in the presentation.<\/p>\nHayashi put European softwood deliveries at around 2 million m\u00b3 a year, within a total imported softwood volume of approximately 4 million m\u00b3.<\/p>\n<\/a><\/p>\nFinland and Sweden dominate European supply, together accounting for more than 70% of the European total cited.<\/p>\n<\/a><\/p>\nThe trade covers several different product groups and end uses.<\/p>\nEuropean lamina is used in the manufacture of glued laminated products. Other supplies serve Japanese post-and-beam construction and the dimension-lumber market associated with two-by-four housing.<\/p>\nSpecies and specifications vary by application. European redwood and whitewood do not compete in precisely the same way across all products, and their exposure to substitution by Japanese species also differs.<\/p>\n<\/a><\/p>\nThis means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. 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![<\/a><\/p>\n<\/a><\/p>\nOne difficulty is the relationship between historical production and export figures. In some years, the reported export volume was close to the officially recorded production total, leaving little apparent room for domestic consumption.<\/p>\nFor Koskinen, this inconsistency limits the usefulness of a simple calculation in which exports are deducted from production to estimate the Russian market.<\/p>\nTrade data reported by importing countries provide a more reliable indication of developments in export activity. Since Russia no longer publishes the same level of export detail, these partner-country statistics have become particularly important.<\/p>\nRegional production patterns also reveal differences within the industry. The north-west had recovered part of its earlier decline in the official figures shown, while Siberia and the Far East remained under more pronounced pressure.<\/p>\nThose eastern regions have traditionally supplied China, making them particularly exposed to the contraction in Chinese demand.<\/p>\nDomestic construction offers some support<\/strong><\/p>\nThe domestic market was one of the few comparatively positive elements in Koskinen\u2019s presentation.<\/p>\nRussian construction activity has provided support to timber consumption, with growth in several residential and non-residential indicators during the period he examined.<\/p>\n<\/a><\/p>\nHowever, he did not regard this as sufficient evidence that domestic timber demand had expanded to the extent implied by the official production and export figures.<\/p>\nHis assessment was that larger sawmills, historically organised around export customers, are increasingly having to sell within Russia.<\/p>\nThat changes the structure of the domestic market. Smaller local mills traditionally supplied much of this business, while larger modern operations concentrated on exports.<\/p>\nAs export opportunities diminish, those larger producers must compete more actively for domestic customers. This may provide an outlet for part of their output, but it does not necessarily replace the prices, specifications or commercial relationships available in their former export markets.<\/p>\n<\/a><\/p>\n<\/a><\/p>\nCurrency, financing and logistics compound the pressure<\/strong><\/p>\nRecent trade developments offered little evidence of a sustained recovery.<\/p>\nIn the year-to-date figures cited by Koskinen, Russian shipments to China were down by nearly 17%, while deliveries to Japan had fallen by approximately 24%. The precise reporting periods will need to be read alongside the presentation charts.<\/p>\n<\/a><\/p>\nBeyond demand, producers face several additional constraints.<\/p>\nA stronger rouble reduces the domestic-currency proceeds of export sales. High financing costs make it difficult to invest, refinance or carry working capital. Transport restrictions and competing demands for rail capacity complicate deliveries to distant customers.<\/p>\nRail access is especially important for shipments to China. Yet the forest products industry does not necessarily receive priority when transport capacity is allocated.<\/p>\n<\/a><\/p>\nFor mills in the north-west, the loss of established European routes has also made the logistics of reaching alternative customers more difficult.<\/p>\nThese costs accumulate along the supply chain. A producer may retain access to a buyer but still face a much weaker commercial outcome once transport, financing and currency effects are included.<\/p>\n<\/a><\/p>\nMaintenance problems threaten the productive asset base<\/strong><\/p>\nKoskinen devoted particular attention to the industry\u2019s dependence on Western machinery.<\/p>\nModern Russian forestry and sawmilling operations were built partly around imported harvesting equipment, processing lines, spare parts and technical services.<\/p>\nRestricted access to those inputs creates difficulties that cannot always be resolved by finding a new supplier for an individual component.<\/p>\nSome equipment and parts continue to reach Russia through third countries or manufacturing locations outside Europe. Producers have also turned towards domestic equipment and Chinese machinery.<\/p>\nHowever, Koskinen said these alternatives do not always provide equivalent productivity or performance.<\/p>\nThe result is a gradual deterioration in the technical condition of parts of the industry. Weak profitability reduces the money available for maintenance, while procurement restrictions make maintenance harder even where funds are available.<\/p>\nThis creates a longer-term problem. A recovery in orders would not necessarily allow every mill to return immediately to its former production level or operating efficiency.<\/p>\nFinancial results show the scale of the damage<\/strong><\/p>\nThe company results presented by Koskinen indicated a substantial decline in revenue and widespread operating losses among the businesses examined.<\/p>\nSeveral mills reported deeply negative margins, with some losses reaching double-digit percentages of turnover.<\/p>\nHe also distinguished between assets previously developed and operated by Western companies and other Russian-owned operations.<\/p>\nThe former Western assets appeared, in his comparison, to have retained a stronger relative position. Their location, equipment and earlier operating standards may have helped them withstand the deterioration in market conditions.<\/p>\nNevertheless, this was a comparison within a struggling industry. Better relative performance did not mean that the underlying commercial environment was favourable.<\/p>\nJob cuts, financial distress and bankruptcies were already part of the adjustment.<\/p>\nEurope has adapted, but product markets differ<\/strong><\/p>\nKoskinen\u2019s assessment was that Europe has managed without Russian softwood lumber.<\/p>\nThe loss of that supply did not create a continuing shortage across the European softwood market. Weak construction demand and adjustments elsewhere in the supply chain have allowed the market to function without a return to its former Russian trade flows.<\/p>\n<\/a><\/p>\nHe contrasted this with birch plywood, where Russia previously supplied a much larger share of European requirements.<\/p>\nThe plywood market has different production constraints and fewer readily available substitutes. Restricted supply has therefore had a different effect on prices and profitability.<\/p>\n<\/a><\/p>\nHis comparison cautioned against applying the experience of one wood product to another. Russia\u2019s importance varies considerably by product, and the commercial consequences of losing its supply differ accordingly.<\/p>\nFor Russian sawmilling, however, the outlook remained difficult. Koskinen saw little prospect of Chinese demand quickly returning to its former peak, while the timing and conditions of any renewed European access remained uncertain.<\/p>\n<\/a><\/p>\nDomestic construction provides some support, but the industry continues to face lower export volumes, a weaker market mix, poor profitability and growing problems maintaining its assets.<\/p>\n<\/h4>\nHiroki Hayashi, Sumitomo Forestry Europe: Japan- European timber remains necessary, but competition is becoming harder<\/em><\/h4>\n<\/a>Hiroki Hayashi<\/figcaption><\/figure>\nHiroki Hayashi approached Japan\u2019s timber market from both a trading and a housing perspective.<\/p>\nSumitomo Forestry\u2019s activities span timber procurement, housebuilding and property-related businesses in Japan and overseas. That combination provided the basis for a presentation linking imported softwood demand to housing affordability, construction methods and competition from domestic species.<\/p>\nHis central assessment was that Japan remains an important market for European suppliers, but growth cannot be assumed within its traditional residential business.<\/p>\nHousing starts face long-term demographic pressure. The weak yen raises the cost of imports. Japanese species have become more competitive in applications where they can meet the required specifications.<\/p>\nAt the same time, non-residential timber construction offers opportunities that are still relatively underdeveloped.<\/p>\nDemographics constrain the housing market<\/strong><\/p>\nJapan\u2019s population is both ageing and declining.<\/p>\nHayashi cited a population of around 123 million, with approximately 30% aged 65 or above. These trends have direct consequences for household formation and the number of new homes required.<\/p>\n<\/a><\/p>\nHis presentation used a housing-start level of roughly 740,000 units as a reference point and discussed scenarios involving further declines.<\/p>\nThe pressures extend beyond population. Higher building costs, affordability constraints and changes in the housing market also affect demand.<\/p>\nWooden housing nevertheless retains a strong position within the total. Hayashi put its share at around 55\u201360% of housing units, supported by an established network of builders, component manufacturers and suppliers.<\/p>\n<\/a><\/p>\nThis provides a substantial base for timber consumption. However, a stable share within a declining housing market does not guarantee stable volumes.<\/p>\nEuropean suppliers therefore face a market in which timber can remain a preferred construction material while the total number of projects falls.<\/p>\nAffordability is weakening despite relatively low mortgage rates<\/strong><\/p>\nHayashi examined the widening gap between household incomes and housing costs.<\/p>\nSalary growth has been limited over a long period, while the cost of land and construction has increased. The pressure is particularly visible in large urban markets.<\/p>\n<\/a><\/p>\nHe pointed to strong apartment-price increases in Tokyo, where land costs, construction expenses and concentrated demand have pushed prices upwards.<\/p>\nDetached housing has, in some cases, remained relatively more accessible. Developers and housebuilders have helped control the total purchase price by reducing plot sizes and adjusting the housing offer.<\/p>\nFinancing conditions are another source of pressure.<\/p>\nJapanese mortgage rates remain relatively low compared with those in many other countries, but their direction matters. A gradual increase adds to the cost of buying a home at a time when construction and land are already expensive.<\/p>\n<\/a><\/p>\nHayashi noted that variable-rate mortgages account for a large share of the market. Changes in financing costs therefore influence purchasing decisions even when the absolute interest rate appears modest by international standards.<\/p>\nThe yen directly affects imported timber\u2019s competitiveness<\/strong><\/p>\nExchange rates are central to the relationship between Japanese buyers and European suppliers.<\/p>\nA weaker yen increases the local-currency cost of imported timber, making it harder for importers to compete against domestic material or pass higher costs through to customers.<\/p>\nHayashi cited an exchange rate of around \u00a5177 to the euro at the time of his presentation, compared with an even weaker level of approximately \u00a5185 a month earlier.<\/p>\n<\/a><\/p>\nSuch movements can alter the relative attractiveness of an imported product within a short period.<\/p>\nFor European producers, a stable euro price may still result in a significant price increase for a Japanese customer. Equally, a strengthening yen can improve purchasing conditions without any reduction in the exporter\u2019s price.<\/p>\nHayashi therefore treated currency movements as a continuing commercial variable, rather than background economic information.<\/p>\nEurope retains a major role in Japan\u2019s softwood supply<\/strong><\/p>\nJapan remains a substantial importer of softwood products, with Europe accounting for roughly half of the import volume discussed in the presentation.<\/p>\nHayashi put European softwood deliveries at around 2 million m\u00b3 a year, within a total imported softwood volume of approximately 4 million m\u00b3.<\/p>\n<\/a><\/p>\nFinland and Sweden dominate European supply, together accounting for more than 70% of the European total cited.<\/p>\n<\/a><\/p>\nThe trade covers several different product groups and end uses.<\/p>\nEuropean lamina is used in the manufacture of glued laminated products. Other supplies serve Japanese post-and-beam construction and the dimension-lumber market associated with two-by-four housing.<\/p>\nSpecies and specifications vary by application. European redwood and whitewood do not compete in precisely the same way across all products, and their exposure to substitution by Japanese species also differs.<\/p>\n<\/a><\/p>\nThis means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. 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![<\/a><\/p>\nOne difficulty is the relationship between historical production and export figures. In some years, the reported export volume was close to the officially recorded production total, leaving little apparent room for domestic consumption.<\/p>\nFor Koskinen, this inconsistency limits the usefulness of a simple calculation in which exports are deducted from production to estimate the Russian market.<\/p>\nTrade data reported by importing countries provide a more reliable indication of developments in export activity. Since Russia no longer publishes the same level of export detail, these partner-country statistics have become particularly important.<\/p>\nRegional production patterns also reveal differences within the industry. The north-west had recovered part of its earlier decline in the official figures shown, while Siberia and the Far East remained under more pronounced pressure.<\/p>\nThose eastern regions have traditionally supplied China, making them particularly exposed to the contraction in Chinese demand.<\/p>\nDomestic construction offers some support<\/strong><\/p>\nThe domestic market was one of the few comparatively positive elements in Koskinen\u2019s presentation.<\/p>\nRussian construction activity has provided support to timber consumption, with growth in several residential and non-residential indicators during the period he examined.<\/p>\n<\/a><\/p>\nHowever, he did not regard this as sufficient evidence that domestic timber demand had expanded to the extent implied by the official production and export figures.<\/p>\nHis assessment was that larger sawmills, historically organised around export customers, are increasingly having to sell within Russia.<\/p>\nThat changes the structure of the domestic market. Smaller local mills traditionally supplied much of this business, while larger modern operations concentrated on exports.<\/p>\nAs export opportunities diminish, those larger producers must compete more actively for domestic customers. This may provide an outlet for part of their output, but it does not necessarily replace the prices, specifications or commercial relationships available in their former export markets.<\/p>\n<\/a><\/p>\n<\/a><\/p>\nCurrency, financing and logistics compound the pressure<\/strong><\/p>\nRecent trade developments offered little evidence of a sustained recovery.<\/p>\nIn the year-to-date figures cited by Koskinen, Russian shipments to China were down by nearly 17%, while deliveries to Japan had fallen by approximately 24%. The precise reporting periods will need to be read alongside the presentation charts.<\/p>\n<\/a><\/p>\nBeyond demand, producers face several additional constraints.<\/p>\nA stronger rouble reduces the domestic-currency proceeds of export sales. High financing costs make it difficult to invest, refinance or carry working capital. Transport restrictions and competing demands for rail capacity complicate deliveries to distant customers.<\/p>\nRail access is especially important for shipments to China. Yet the forest products industry does not necessarily receive priority when transport capacity is allocated.<\/p>\n<\/a><\/p>\nFor mills in the north-west, the loss of established European routes has also made the logistics of reaching alternative customers more difficult.<\/p>\nThese costs accumulate along the supply chain. A producer may retain access to a buyer but still face a much weaker commercial outcome once transport, financing and currency effects are included.<\/p>\n<\/a><\/p>\nMaintenance problems threaten the productive asset base<\/strong><\/p>\nKoskinen devoted particular attention to the industry\u2019s dependence on Western machinery.<\/p>\nModern Russian forestry and sawmilling operations were built partly around imported harvesting equipment, processing lines, spare parts and technical services.<\/p>\nRestricted access to those inputs creates difficulties that cannot always be resolved by finding a new supplier for an individual component.<\/p>\nSome equipment and parts continue to reach Russia through third countries or manufacturing locations outside Europe. Producers have also turned towards domestic equipment and Chinese machinery.<\/p>\nHowever, Koskinen said these alternatives do not always provide equivalent productivity or performance.<\/p>\nThe result is a gradual deterioration in the technical condition of parts of the industry. Weak profitability reduces the money available for maintenance, while procurement restrictions make maintenance harder even where funds are available.<\/p>\nThis creates a longer-term problem. A recovery in orders would not necessarily allow every mill to return immediately to its former production level or operating efficiency.<\/p>\nFinancial results show the scale of the damage<\/strong><\/p>\nThe company results presented by Koskinen indicated a substantial decline in revenue and widespread operating losses among the businesses examined.<\/p>\nSeveral mills reported deeply negative margins, with some losses reaching double-digit percentages of turnover.<\/p>\nHe also distinguished between assets previously developed and operated by Western companies and other Russian-owned operations.<\/p>\nThe former Western assets appeared, in his comparison, to have retained a stronger relative position. Their location, equipment and earlier operating standards may have helped them withstand the deterioration in market conditions.<\/p>\nNevertheless, this was a comparison within a struggling industry. Better relative performance did not mean that the underlying commercial environment was favourable.<\/p>\nJob cuts, financial distress and bankruptcies were already part of the adjustment.<\/p>\nEurope has adapted, but product markets differ<\/strong><\/p>\nKoskinen\u2019s assessment was that Europe has managed without Russian softwood lumber.<\/p>\nThe loss of that supply did not create a continuing shortage across the European softwood market. Weak construction demand and adjustments elsewhere in the supply chain have allowed the market to function without a return to its former Russian trade flows.<\/p>\n<\/a><\/p>\nHe contrasted this with birch plywood, where Russia previously supplied a much larger share of European requirements.<\/p>\nThe plywood market has different production constraints and fewer readily available substitutes. Restricted supply has therefore had a different effect on prices and profitability.<\/p>\n<\/a><\/p>\nHis comparison cautioned against applying the experience of one wood product to another. Russia\u2019s importance varies considerably by product, and the commercial consequences of losing its supply differ accordingly.<\/p>\nFor Russian sawmilling, however, the outlook remained difficult. Koskinen saw little prospect of Chinese demand quickly returning to its former peak, while the timing and conditions of any renewed European access remained uncertain.<\/p>\n<\/a><\/p>\nDomestic construction provides some support, but the industry continues to face lower export volumes, a weaker market mix, poor profitability and growing problems maintaining its assets.<\/p>\n<\/h4>\nHiroki Hayashi, Sumitomo Forestry Europe: Japan- European timber remains necessary, but competition is becoming harder<\/em><\/h4>\n<\/a>Hiroki Hayashi<\/figcaption><\/figure>\nHiroki Hayashi approached Japan\u2019s timber market from both a trading and a housing perspective.<\/p>\nSumitomo Forestry\u2019s activities span timber procurement, housebuilding and property-related businesses in Japan and overseas. That combination provided the basis for a presentation linking imported softwood demand to housing affordability, construction methods and competition from domestic species.<\/p>\nHis central assessment was that Japan remains an important market for European suppliers, but growth cannot be assumed within its traditional residential business.<\/p>\nHousing starts face long-term demographic pressure. The weak yen raises the cost of imports. Japanese species have become more competitive in applications where they can meet the required specifications.<\/p>\nAt the same time, non-residential timber construction offers opportunities that are still relatively underdeveloped.<\/p>\nDemographics constrain the housing market<\/strong><\/p>\nJapan\u2019s population is both ageing and declining.<\/p>\nHayashi cited a population of around 123 million, with approximately 30% aged 65 or above. These trends have direct consequences for household formation and the number of new homes required.<\/p>\n<\/a><\/p>\nHis presentation used a housing-start level of roughly 740,000 units as a reference point and discussed scenarios involving further declines.<\/p>\nThe pressures extend beyond population. Higher building costs, affordability constraints and changes in the housing market also affect demand.<\/p>\nWooden housing nevertheless retains a strong position within the total. Hayashi put its share at around 55\u201360% of housing units, supported by an established network of builders, component manufacturers and suppliers.<\/p>\n<\/a><\/p>\nThis provides a substantial base for timber consumption. However, a stable share within a declining housing market does not guarantee stable volumes.<\/p>\nEuropean suppliers therefore face a market in which timber can remain a preferred construction material while the total number of projects falls.<\/p>\nAffordability is weakening despite relatively low mortgage rates<\/strong><\/p>\nHayashi examined the widening gap between household incomes and housing costs.<\/p>\nSalary growth has been limited over a long period, while the cost of land and construction has increased. The pressure is particularly visible in large urban markets.<\/p>\n<\/a><\/p>\nHe pointed to strong apartment-price increases in Tokyo, where land costs, construction expenses and concentrated demand have pushed prices upwards.<\/p>\nDetached housing has, in some cases, remained relatively more accessible. Developers and housebuilders have helped control the total purchase price by reducing plot sizes and adjusting the housing offer.<\/p>\nFinancing conditions are another source of pressure.<\/p>\nJapanese mortgage rates remain relatively low compared with those in many other countries, but their direction matters. A gradual increase adds to the cost of buying a home at a time when construction and land are already expensive.<\/p>\n<\/a><\/p>\nHayashi noted that variable-rate mortgages account for a large share of the market. Changes in financing costs therefore influence purchasing decisions even when the absolute interest rate appears modest by international standards.<\/p>\nThe yen directly affects imported timber\u2019s competitiveness<\/strong><\/p>\nExchange rates are central to the relationship between Japanese buyers and European suppliers.<\/p>\nA weaker yen increases the local-currency cost of imported timber, making it harder for importers to compete against domestic material or pass higher costs through to customers.<\/p>\nHayashi cited an exchange rate of around \u00a5177 to the euro at the time of his presentation, compared with an even weaker level of approximately \u00a5185 a month earlier.<\/p>\n<\/a><\/p>\nSuch movements can alter the relative attractiveness of an imported product within a short period.<\/p>\nFor European producers, a stable euro price may still result in a significant price increase for a Japanese customer. Equally, a strengthening yen can improve purchasing conditions without any reduction in the exporter\u2019s price.<\/p>\nHayashi therefore treated currency movements as a continuing commercial variable, rather than background economic information.<\/p>\nEurope retains a major role in Japan\u2019s softwood supply<\/strong><\/p>\nJapan remains a substantial importer of softwood products, with Europe accounting for roughly half of the import volume discussed in the presentation.<\/p>\nHayashi put European softwood deliveries at around 2 million m\u00b3 a year, within a total imported softwood volume of approximately 4 million m\u00b3.<\/p>\n<\/a><\/p>\nFinland and Sweden dominate European supply, together accounting for more than 70% of the European total cited.<\/p>\n<\/a><\/p>\nThe trade covers several different product groups and end uses.<\/p>\nEuropean lamina is used in the manufacture of glued laminated products. Other supplies serve Japanese post-and-beam construction and the dimension-lumber market associated with two-by-four housing.<\/p>\nSpecies and specifications vary by application. European redwood and whitewood do not compete in precisely the same way across all products, and their exposure to substitution by Japanese species also differs.<\/p>\n<\/a><\/p>\nThis means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. 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Timber Industry News","isPartOf":{"@id":"https:\/\/www.timberindustrynews.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"thumbnailUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","datePublished":"2026-11-02T08:23:36+00:00","dateModified":"2026-11-02T21:39:51+00:00","inLanguage":"ro-RO","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/"]}]},{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","width":1536,"height":1024,"caption":"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade"},{"@type":"WebSite","@id":"https:\/\/www.timberindustrynews.com\/#website","url":"https:\/\/www.timberindustrynews.com\/","name":"\u0218tiri din industria lemnului","description":"","publisher":{"@id":"https:\/\/www.timberindustrynews.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.timberindustrynews.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"ro-RO"},{"@type":"Organization","@id":"https:\/\/www.timberindustrynews.com\/#organization","name":"\u0218tiri din industria lemnului","url":"https:\/\/www.timberindustrynews.com\/","logo":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","width":150,"height":57,"caption":"Timber Industry News"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/person\/135a1ae8119d1d1755135add5b7287ff","name":"GWMI Admin","image":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","caption":"GWMI Admin"}}]}},"_links":{"self":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/comments?post=100471"}],"version-history":[{"count":1,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions"}],"predecessor-version":[{"id":100473,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions\/100473"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media\/100472"}],"wp:attachment":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media?parent=100471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/categories?post=100471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/tags?post=100471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}](\"https:\/\/www.globalwoodmarketsinfo.com\/wp-content\/uploads\/2026\/11\/09_russia_regional_production.jpg\"){kind=link}
![<\/a><\/p>\nHowever, he did not regard this as sufficient evidence that domestic timber demand had expanded to the extent implied by the official production and export figures.<\/p>\nHis assessment was that larger sawmills, historically organised around export customers, are increasingly having to sell within Russia.<\/p>\nThat changes the structure of the domestic market. Smaller local mills traditionally supplied much of this business, while larger modern operations concentrated on exports.<\/p>\nAs export opportunities diminish, those larger producers must compete more actively for domestic customers. This may provide an outlet for part of their output, but it does not necessarily replace the prices, specifications or commercial relationships available in their former export markets.<\/p>\n<\/a><\/p>\n<\/a><\/p>\nCurrency, financing and logistics compound the pressure<\/strong><\/p>\nRecent trade developments offered little evidence of a sustained recovery.<\/p>\nIn the year-to-date figures cited by Koskinen, Russian shipments to China were down by nearly 17%, while deliveries to Japan had fallen by approximately 24%. The precise reporting periods will need to be read alongside the presentation charts.<\/p>\n<\/a><\/p>\nBeyond demand, producers face several additional constraints.<\/p>\nA stronger rouble reduces the domestic-currency proceeds of export sales. High financing costs make it difficult to invest, refinance or carry working capital. Transport restrictions and competing demands for rail capacity complicate deliveries to distant customers.<\/p>\nRail access is especially important for shipments to China. Yet the forest products industry does not necessarily receive priority when transport capacity is allocated.<\/p>\n<\/a><\/p>\nFor mills in the north-west, the loss of established European routes has also made the logistics of reaching alternative customers more difficult.<\/p>\nThese costs accumulate along the supply chain. A producer may retain access to a buyer but still face a much weaker commercial outcome once transport, financing and currency effects are included.<\/p>\n<\/a><\/p>\nMaintenance problems threaten the productive asset base<\/strong><\/p>\nKoskinen devoted particular attention to the industry\u2019s dependence on Western machinery.<\/p>\nModern Russian forestry and sawmilling operations were built partly around imported harvesting equipment, processing lines, spare parts and technical services.<\/p>\nRestricted access to those inputs creates difficulties that cannot always be resolved by finding a new supplier for an individual component.<\/p>\nSome equipment and parts continue to reach Russia through third countries or manufacturing locations outside Europe. Producers have also turned towards domestic equipment and Chinese machinery.<\/p>\nHowever, Koskinen said these alternatives do not always provide equivalent productivity or performance.<\/p>\nThe result is a gradual deterioration in the technical condition of parts of the industry. Weak profitability reduces the money available for maintenance, while procurement restrictions make maintenance harder even where funds are available.<\/p>\nThis creates a longer-term problem. A recovery in orders would not necessarily allow every mill to return immediately to its former production level or operating efficiency.<\/p>\nFinancial results show the scale of the damage<\/strong><\/p>\nThe company results presented by Koskinen indicated a substantial decline in revenue and widespread operating losses among the businesses examined.<\/p>\nSeveral mills reported deeply negative margins, with some losses reaching double-digit percentages of turnover.<\/p>\nHe also distinguished between assets previously developed and operated by Western companies and other Russian-owned operations.<\/p>\nThe former Western assets appeared, in his comparison, to have retained a stronger relative position. Their location, equipment and earlier operating standards may have helped them withstand the deterioration in market conditions.<\/p>\nNevertheless, this was a comparison within a struggling industry. Better relative performance did not mean that the underlying commercial environment was favourable.<\/p>\nJob cuts, financial distress and bankruptcies were already part of the adjustment.<\/p>\nEurope has adapted, but product markets differ<\/strong><\/p>\nKoskinen\u2019s assessment was that Europe has managed without Russian softwood lumber.<\/p>\nThe loss of that supply did not create a continuing shortage across the European softwood market. Weak construction demand and adjustments elsewhere in the supply chain have allowed the market to function without a return to its former Russian trade flows.<\/p>\n<\/a><\/p>\nHe contrasted this with birch plywood, where Russia previously supplied a much larger share of European requirements.<\/p>\nThe plywood market has different production constraints and fewer readily available substitutes. Restricted supply has therefore had a different effect on prices and profitability.<\/p>\n<\/a><\/p>\nHis comparison cautioned against applying the experience of one wood product to another. Russia\u2019s importance varies considerably by product, and the commercial consequences of losing its supply differ accordingly.<\/p>\nFor Russian sawmilling, however, the outlook remained difficult. Koskinen saw little prospect of Chinese demand quickly returning to its former peak, while the timing and conditions of any renewed European access remained uncertain.<\/p>\n<\/a><\/p>\nDomestic construction provides some support, but the industry continues to face lower export volumes, a weaker market mix, poor profitability and growing problems maintaining its assets.<\/p>\n<\/h4>\nHiroki Hayashi, Sumitomo Forestry Europe: Japan- European timber remains necessary, but competition is becoming harder<\/em><\/h4>\n<\/a>Hiroki Hayashi<\/figcaption><\/figure>\nHiroki Hayashi approached Japan\u2019s timber market from both a trading and a housing perspective.<\/p>\nSumitomo Forestry\u2019s activities span timber procurement, housebuilding and property-related businesses in Japan and overseas. That combination provided the basis for a presentation linking imported softwood demand to housing affordability, construction methods and competition from domestic species.<\/p>\nHis central assessment was that Japan remains an important market for European suppliers, but growth cannot be assumed within its traditional residential business.<\/p>\nHousing starts face long-term demographic pressure. The weak yen raises the cost of imports. Japanese species have become more competitive in applications where they can meet the required specifications.<\/p>\nAt the same time, non-residential timber construction offers opportunities that are still relatively underdeveloped.<\/p>\nDemographics constrain the housing market<\/strong><\/p>\nJapan\u2019s population is both ageing and declining.<\/p>\nHayashi cited a population of around 123 million, with approximately 30% aged 65 or above. These trends have direct consequences for household formation and the number of new homes required.<\/p>\n<\/a><\/p>\nHis presentation used a housing-start level of roughly 740,000 units as a reference point and discussed scenarios involving further declines.<\/p>\nThe pressures extend beyond population. Higher building costs, affordability constraints and changes in the housing market also affect demand.<\/p>\nWooden housing nevertheless retains a strong position within the total. Hayashi put its share at around 55\u201360% of housing units, supported by an established network of builders, component manufacturers and suppliers.<\/p>\n<\/a><\/p>\nThis provides a substantial base for timber consumption. However, a stable share within a declining housing market does not guarantee stable volumes.<\/p>\nEuropean suppliers therefore face a market in which timber can remain a preferred construction material while the total number of projects falls.<\/p>\nAffordability is weakening despite relatively low mortgage rates<\/strong><\/p>\nHayashi examined the widening gap between household incomes and housing costs.<\/p>\nSalary growth has been limited over a long period, while the cost of land and construction has increased. The pressure is particularly visible in large urban markets.<\/p>\n<\/a><\/p>\nHe pointed to strong apartment-price increases in Tokyo, where land costs, construction expenses and concentrated demand have pushed prices upwards.<\/p>\nDetached housing has, in some cases, remained relatively more accessible. Developers and housebuilders have helped control the total purchase price by reducing plot sizes and adjusting the housing offer.<\/p>\nFinancing conditions are another source of pressure.<\/p>\nJapanese mortgage rates remain relatively low compared with those in many other countries, but their direction matters. A gradual increase adds to the cost of buying a home at a time when construction and land are already expensive.<\/p>\n<\/a><\/p>\nHayashi noted that variable-rate mortgages account for a large share of the market. Changes in financing costs therefore influence purchasing decisions even when the absolute interest rate appears modest by international standards.<\/p>\nThe yen directly affects imported timber\u2019s competitiveness<\/strong><\/p>\nExchange rates are central to the relationship between Japanese buyers and European suppliers.<\/p>\nA weaker yen increases the local-currency cost of imported timber, making it harder for importers to compete against domestic material or pass higher costs through to customers.<\/p>\nHayashi cited an exchange rate of around \u00a5177 to the euro at the time of his presentation, compared with an even weaker level of approximately \u00a5185 a month earlier.<\/p>\n<\/a><\/p>\nSuch movements can alter the relative attractiveness of an imported product within a short period.<\/p>\nFor European producers, a stable euro price may still result in a significant price increase for a Japanese customer. Equally, a strengthening yen can improve purchasing conditions without any reduction in the exporter\u2019s price.<\/p>\nHayashi therefore treated currency movements as a continuing commercial variable, rather than background economic information.<\/p>\nEurope retains a major role in Japan\u2019s softwood supply<\/strong><\/p>\nJapan remains a substantial importer of softwood products, with Europe accounting for roughly half of the import volume discussed in the presentation.<\/p>\nHayashi put European softwood deliveries at around 2 million m\u00b3 a year, within a total imported softwood volume of approximately 4 million m\u00b3.<\/p>\n<\/a><\/p>\nFinland and Sweden dominate European supply, together accounting for more than 70% of the European total cited.<\/p>\n<\/a><\/p>\nThe trade covers several different product groups and end uses.<\/p>\nEuropean lamina is used in the manufacture of glued laminated products. Other supplies serve Japanese post-and-beam construction and the dimension-lumber market associated with two-by-four housing.<\/p>\nSpecies and specifications vary by application. European redwood and whitewood do not compete in precisely the same way across all products, and their exposure to substitution by Japanese species also differs.<\/p>\n<\/a><\/p>\nThis means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. 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Timber Industry News","isPartOf":{"@id":"https:\/\/www.timberindustrynews.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"thumbnailUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","datePublished":"2026-11-02T08:23:36+00:00","dateModified":"2026-11-02T21:39:51+00:00","inLanguage":"ro-RO","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/"]}]},{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","width":1536,"height":1024,"caption":"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade"},{"@type":"WebSite","@id":"https:\/\/www.timberindustrynews.com\/#website","url":"https:\/\/www.timberindustrynews.com\/","name":"\u0218tiri din industria lemnului","description":"","publisher":{"@id":"https:\/\/www.timberindustrynews.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.timberindustrynews.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"ro-RO"},{"@type":"Organization","@id":"https:\/\/www.timberindustrynews.com\/#organization","name":"\u0218tiri din industria lemnului","url":"https:\/\/www.timberindustrynews.com\/","logo":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","width":150,"height":57,"caption":"Timber Industry News"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/person\/135a1ae8119d1d1755135add5b7287ff","name":"GWMI Admin","image":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","caption":"GWMI Admin"}}]}},"_links":{"self":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/comments?post=100471"}],"version-history":[{"count":1,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions"}],"predecessor-version":[{"id":100473,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions\/100473"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media\/100472"}],"wp:attachment":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media?parent=100471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/categories?post=100471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/tags?post=100471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}](\"https:\/\/www.globalwoodmarketsinfo.com\/wp-content\/uploads\/2026\/11\/10_russia_construction.jpg\"){kind=link}
![<\/a><\/p>\n<\/a><\/p>\nCurrency, financing and logistics compound the pressure<\/strong><\/p>\nRecent trade developments offered little evidence of a sustained recovery.<\/p>\nIn the year-to-date figures cited by Koskinen, Russian shipments to China were down by nearly 17%, while deliveries to Japan had fallen by approximately 24%. The precise reporting periods will need to be read alongside the presentation charts.<\/p>\n<\/a><\/p>\nBeyond demand, producers face several additional constraints.<\/p>\nA stronger rouble reduces the domestic-currency proceeds of export sales. High financing costs make it difficult to invest, refinance or carry working capital. Transport restrictions and competing demands for rail capacity complicate deliveries to distant customers.<\/p>\nRail access is especially important for shipments to China. Yet the forest products industry does not necessarily receive priority when transport capacity is allocated.<\/p>\n<\/a><\/p>\nFor mills in the north-west, the loss of established European routes has also made the logistics of reaching alternative customers more difficult.<\/p>\nThese costs accumulate along the supply chain. A producer may retain access to a buyer but still face a much weaker commercial outcome once transport, financing and currency effects are included.<\/p>\n<\/a><\/p>\nMaintenance problems threaten the productive asset base<\/strong><\/p>\nKoskinen devoted particular attention to the industry\u2019s dependence on Western machinery.<\/p>\nModern Russian forestry and sawmilling operations were built partly around imported harvesting equipment, processing lines, spare parts and technical services.<\/p>\nRestricted access to those inputs creates difficulties that cannot always be resolved by finding a new supplier for an individual component.<\/p>\nSome equipment and parts continue to reach Russia through third countries or manufacturing locations outside Europe. Producers have also turned towards domestic equipment and Chinese machinery.<\/p>\nHowever, Koskinen said these alternatives do not always provide equivalent productivity or performance.<\/p>\nThe result is a gradual deterioration in the technical condition of parts of the industry. Weak profitability reduces the money available for maintenance, while procurement restrictions make maintenance harder even where funds are available.<\/p>\nThis creates a longer-term problem. A recovery in orders would not necessarily allow every mill to return immediately to its former production level or operating efficiency.<\/p>\nFinancial results show the scale of the damage<\/strong><\/p>\nThe company results presented by Koskinen indicated a substantial decline in revenue and widespread operating losses among the businesses examined.<\/p>\nSeveral mills reported deeply negative margins, with some losses reaching double-digit percentages of turnover.<\/p>\nHe also distinguished between assets previously developed and operated by Western companies and other Russian-owned operations.<\/p>\nThe former Western assets appeared, in his comparison, to have retained a stronger relative position. Their location, equipment and earlier operating standards may have helped them withstand the deterioration in market conditions.<\/p>\nNevertheless, this was a comparison within a struggling industry. Better relative performance did not mean that the underlying commercial environment was favourable.<\/p>\nJob cuts, financial distress and bankruptcies were already part of the adjustment.<\/p>\nEurope has adapted, but product markets differ<\/strong><\/p>\nKoskinen\u2019s assessment was that Europe has managed without Russian softwood lumber.<\/p>\nThe loss of that supply did not create a continuing shortage across the European softwood market. Weak construction demand and adjustments elsewhere in the supply chain have allowed the market to function without a return to its former Russian trade flows.<\/p>\n<\/a><\/p>\nHe contrasted this with birch plywood, where Russia previously supplied a much larger share of European requirements.<\/p>\nThe plywood market has different production constraints and fewer readily available substitutes. Restricted supply has therefore had a different effect on prices and profitability.<\/p>\n<\/a><\/p>\nHis comparison cautioned against applying the experience of one wood product to another. Russia\u2019s importance varies considerably by product, and the commercial consequences of losing its supply differ accordingly.<\/p>\nFor Russian sawmilling, however, the outlook remained difficult. Koskinen saw little prospect of Chinese demand quickly returning to its former peak, while the timing and conditions of any renewed European access remained uncertain.<\/p>\n<\/a><\/p>\nDomestic construction provides some support, but the industry continues to face lower export volumes, a weaker market mix, poor profitability and growing problems maintaining its assets.<\/p>\n<\/h4>\nHiroki Hayashi, Sumitomo Forestry Europe: Japan- European timber remains necessary, but competition is becoming harder<\/em><\/h4>\n<\/a>Hiroki Hayashi<\/figcaption><\/figure>\nHiroki Hayashi approached Japan\u2019s timber market from both a trading and a housing perspective.<\/p>\nSumitomo Forestry\u2019s activities span timber procurement, housebuilding and property-related businesses in Japan and overseas. That combination provided the basis for a presentation linking imported softwood demand to housing affordability, construction methods and competition from domestic species.<\/p>\nHis central assessment was that Japan remains an important market for European suppliers, but growth cannot be assumed within its traditional residential business.<\/p>\nHousing starts face long-term demographic pressure. The weak yen raises the cost of imports. Japanese species have become more competitive in applications where they can meet the required specifications.<\/p>\nAt the same time, non-residential timber construction offers opportunities that are still relatively underdeveloped.<\/p>\nDemographics constrain the housing market<\/strong><\/p>\nJapan\u2019s population is both ageing and declining.<\/p>\nHayashi cited a population of around 123 million, with approximately 30% aged 65 or above. These trends have direct consequences for household formation and the number of new homes required.<\/p>\n<\/a><\/p>\nHis presentation used a housing-start level of roughly 740,000 units as a reference point and discussed scenarios involving further declines.<\/p>\nThe pressures extend beyond population. Higher building costs, affordability constraints and changes in the housing market also affect demand.<\/p>\nWooden housing nevertheless retains a strong position within the total. Hayashi put its share at around 55\u201360% of housing units, supported by an established network of builders, component manufacturers and suppliers.<\/p>\n<\/a><\/p>\nThis provides a substantial base for timber consumption. However, a stable share within a declining housing market does not guarantee stable volumes.<\/p>\nEuropean suppliers therefore face a market in which timber can remain a preferred construction material while the total number of projects falls.<\/p>\nAffordability is weakening despite relatively low mortgage rates<\/strong><\/p>\nHayashi examined the widening gap between household incomes and housing costs.<\/p>\nSalary growth has been limited over a long period, while the cost of land and construction has increased. The pressure is particularly visible in large urban markets.<\/p>\n<\/a><\/p>\nHe pointed to strong apartment-price increases in Tokyo, where land costs, construction expenses and concentrated demand have pushed prices upwards.<\/p>\nDetached housing has, in some cases, remained relatively more accessible. Developers and housebuilders have helped control the total purchase price by reducing plot sizes and adjusting the housing offer.<\/p>\nFinancing conditions are another source of pressure.<\/p>\nJapanese mortgage rates remain relatively low compared with those in many other countries, but their direction matters. A gradual increase adds to the cost of buying a home at a time when construction and land are already expensive.<\/p>\n<\/a><\/p>\nHayashi noted that variable-rate mortgages account for a large share of the market. Changes in financing costs therefore influence purchasing decisions even when the absolute interest rate appears modest by international standards.<\/p>\nThe yen directly affects imported timber\u2019s competitiveness<\/strong><\/p>\nExchange rates are central to the relationship between Japanese buyers and European suppliers.<\/p>\nA weaker yen increases the local-currency cost of imported timber, making it harder for importers to compete against domestic material or pass higher costs through to customers.<\/p>\nHayashi cited an exchange rate of around \u00a5177 to the euro at the time of his presentation, compared with an even weaker level of approximately \u00a5185 a month earlier.<\/p>\n<\/a><\/p>\nSuch movements can alter the relative attractiveness of an imported product within a short period.<\/p>\nFor European producers, a stable euro price may still result in a significant price increase for a Japanese customer. Equally, a strengthening yen can improve purchasing conditions without any reduction in the exporter\u2019s price.<\/p>\nHayashi therefore treated currency movements as a continuing commercial variable, rather than background economic information.<\/p>\nEurope retains a major role in Japan\u2019s softwood supply<\/strong><\/p>\nJapan remains a substantial importer of softwood products, with Europe accounting for roughly half of the import volume discussed in the presentation.<\/p>\nHayashi put European softwood deliveries at around 2 million m\u00b3 a year, within a total imported softwood volume of approximately 4 million m\u00b3.<\/p>\n<\/a><\/p>\nFinland and Sweden dominate European supply, together accounting for more than 70% of the European total cited.<\/p>\n<\/a><\/p>\nThe trade covers several different product groups and end uses.<\/p>\nEuropean lamina is used in the manufacture of glued laminated products. Other supplies serve Japanese post-and-beam construction and the dimension-lumber market associated with two-by-four housing.<\/p>\nSpecies and specifications vary by application. European redwood and whitewood do not compete in precisely the same way across all products, and their exposure to substitution by Japanese species also differs.<\/p>\n<\/a><\/p>\nThis means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. 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Timber Industry News","isPartOf":{"@id":"https:\/\/www.timberindustrynews.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"thumbnailUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","datePublished":"2026-11-02T08:23:36+00:00","dateModified":"2026-11-02T21:39:51+00:00","inLanguage":"ro-RO","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/"]}]},{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","width":1536,"height":1024,"caption":"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade"},{"@type":"WebSite","@id":"https:\/\/www.timberindustrynews.com\/#website","url":"https:\/\/www.timberindustrynews.com\/","name":"\u0218tiri din industria lemnului","description":"","publisher":{"@id":"https:\/\/www.timberindustrynews.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.timberindustrynews.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"ro-RO"},{"@type":"Organization","@id":"https:\/\/www.timberindustrynews.com\/#organization","name":"\u0218tiri din industria lemnului","url":"https:\/\/www.timberindustrynews.com\/","logo":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","width":150,"height":57,"caption":"Timber Industry News"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/person\/135a1ae8119d1d1755135add5b7287ff","name":"GWMI Admin","image":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","caption":"GWMI Admin"}}]}},"_links":{"self":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/comments?post=100471"}],"version-history":[{"count":1,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions"}],"predecessor-version":[{"id":100473,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions\/100473"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media\/100472"}],"wp:attachment":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media?parent=100471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/categories?post=100471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/tags?post=100471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}](\"https:\/\/www.globalwoodmarketsinfo.com\/wp-content\/uploads\/2026\/11\/11_russia_logging_2026.jpg\"){kind=link}
![<\/a><\/p>\nCurrency, financing and logistics compound the pressure<\/strong><\/p>\nRecent trade developments offered little evidence of a sustained recovery.<\/p>\nIn the year-to-date figures cited by Koskinen, Russian shipments to China were down by nearly 17%, while deliveries to Japan had fallen by approximately 24%. The precise reporting periods will need to be read alongside the presentation charts.<\/p>\n<\/a><\/p>\nBeyond demand, producers face several additional constraints.<\/p>\nA stronger rouble reduces the domestic-currency proceeds of export sales. High financing costs make it difficult to invest, refinance or carry working capital. Transport restrictions and competing demands for rail capacity complicate deliveries to distant customers.<\/p>\nRail access is especially important for shipments to China. Yet the forest products industry does not necessarily receive priority when transport capacity is allocated.<\/p>\n<\/a><\/p>\nFor mills in the north-west, the loss of established European routes has also made the logistics of reaching alternative customers more difficult.<\/p>\nThese costs accumulate along the supply chain. A producer may retain access to a buyer but still face a much weaker commercial outcome once transport, financing and currency effects are included.<\/p>\n<\/a><\/p>\nMaintenance problems threaten the productive asset base<\/strong><\/p>\nKoskinen devoted particular attention to the industry\u2019s dependence on Western machinery.<\/p>\nModern Russian forestry and sawmilling operations were built partly around imported harvesting equipment, processing lines, spare parts and technical services.<\/p>\nRestricted access to those inputs creates difficulties that cannot always be resolved by finding a new supplier for an individual component.<\/p>\nSome equipment and parts continue to reach Russia through third countries or manufacturing locations outside Europe. Producers have also turned towards domestic equipment and Chinese machinery.<\/p>\nHowever, Koskinen said these alternatives do not always provide equivalent productivity or performance.<\/p>\nThe result is a gradual deterioration in the technical condition of parts of the industry. Weak profitability reduces the money available for maintenance, while procurement restrictions make maintenance harder even where funds are available.<\/p>\nThis creates a longer-term problem. A recovery in orders would not necessarily allow every mill to return immediately to its former production level or operating efficiency.<\/p>\nFinancial results show the scale of the damage<\/strong><\/p>\nThe company results presented by Koskinen indicated a substantial decline in revenue and widespread operating losses among the businesses examined.<\/p>\nSeveral mills reported deeply negative margins, with some losses reaching double-digit percentages of turnover.<\/p>\nHe also distinguished between assets previously developed and operated by Western companies and other Russian-owned operations.<\/p>\nThe former Western assets appeared, in his comparison, to have retained a stronger relative position. Their location, equipment and earlier operating standards may have helped them withstand the deterioration in market conditions.<\/p>\nNevertheless, this was a comparison within a struggling industry. Better relative performance did not mean that the underlying commercial environment was favourable.<\/p>\nJob cuts, financial distress and bankruptcies were already part of the adjustment.<\/p>\nEurope has adapted, but product markets differ<\/strong><\/p>\nKoskinen\u2019s assessment was that Europe has managed without Russian softwood lumber.<\/p>\nThe loss of that supply did not create a continuing shortage across the European softwood market. Weak construction demand and adjustments elsewhere in the supply chain have allowed the market to function without a return to its former Russian trade flows.<\/p>\n<\/a><\/p>\nHe contrasted this with birch plywood, where Russia previously supplied a much larger share of European requirements.<\/p>\nThe plywood market has different production constraints and fewer readily available substitutes. Restricted supply has therefore had a different effect on prices and profitability.<\/p>\n<\/a><\/p>\nHis comparison cautioned against applying the experience of one wood product to another. Russia\u2019s importance varies considerably by product, and the commercial consequences of losing its supply differ accordingly.<\/p>\nFor Russian sawmilling, however, the outlook remained difficult. Koskinen saw little prospect of Chinese demand quickly returning to its former peak, while the timing and conditions of any renewed European access remained uncertain.<\/p>\n<\/a><\/p>\nDomestic construction provides some support, but the industry continues to face lower export volumes, a weaker market mix, poor profitability and growing problems maintaining its assets.<\/p>\n<\/h4>\nHiroki Hayashi, Sumitomo Forestry Europe: Japan- European timber remains necessary, but competition is becoming harder<\/em><\/h4>\n<\/a>Hiroki Hayashi<\/figcaption><\/figure>\nHiroki Hayashi approached Japan\u2019s timber market from both a trading and a housing perspective.<\/p>\nSumitomo Forestry\u2019s activities span timber procurement, housebuilding and property-related businesses in Japan and overseas. That combination provided the basis for a presentation linking imported softwood demand to housing affordability, construction methods and competition from domestic species.<\/p>\nHis central assessment was that Japan remains an important market for European suppliers, but growth cannot be assumed within its traditional residential business.<\/p>\nHousing starts face long-term demographic pressure. The weak yen raises the cost of imports. Japanese species have become more competitive in applications where they can meet the required specifications.<\/p>\nAt the same time, non-residential timber construction offers opportunities that are still relatively underdeveloped.<\/p>\nDemographics constrain the housing market<\/strong><\/p>\nJapan\u2019s population is both ageing and declining.<\/p>\nHayashi cited a population of around 123 million, with approximately 30% aged 65 or above. These trends have direct consequences for household formation and the number of new homes required.<\/p>\n<\/a><\/p>\nHis presentation used a housing-start level of roughly 740,000 units as a reference point and discussed scenarios involving further declines.<\/p>\nThe pressures extend beyond population. Higher building costs, affordability constraints and changes in the housing market also affect demand.<\/p>\nWooden housing nevertheless retains a strong position within the total. Hayashi put its share at around 55\u201360% of housing units, supported by an established network of builders, component manufacturers and suppliers.<\/p>\n<\/a><\/p>\nThis provides a substantial base for timber consumption. However, a stable share within a declining housing market does not guarantee stable volumes.<\/p>\nEuropean suppliers therefore face a market in which timber can remain a preferred construction material while the total number of projects falls.<\/p>\nAffordability is weakening despite relatively low mortgage rates<\/strong><\/p>\nHayashi examined the widening gap between household incomes and housing costs.<\/p>\nSalary growth has been limited over a long period, while the cost of land and construction has increased. The pressure is particularly visible in large urban markets.<\/p>\n<\/a><\/p>\nHe pointed to strong apartment-price increases in Tokyo, where land costs, construction expenses and concentrated demand have pushed prices upwards.<\/p>\nDetached housing has, in some cases, remained relatively more accessible. Developers and housebuilders have helped control the total purchase price by reducing plot sizes and adjusting the housing offer.<\/p>\nFinancing conditions are another source of pressure.<\/p>\nJapanese mortgage rates remain relatively low compared with those in many other countries, but their direction matters. A gradual increase adds to the cost of buying a home at a time when construction and land are already expensive.<\/p>\n<\/a><\/p>\nHayashi noted that variable-rate mortgages account for a large share of the market. Changes in financing costs therefore influence purchasing decisions even when the absolute interest rate appears modest by international standards.<\/p>\nThe yen directly affects imported timber\u2019s competitiveness<\/strong><\/p>\nExchange rates are central to the relationship between Japanese buyers and European suppliers.<\/p>\nA weaker yen increases the local-currency cost of imported timber, making it harder for importers to compete against domestic material or pass higher costs through to customers.<\/p>\nHayashi cited an exchange rate of around \u00a5177 to the euro at the time of his presentation, compared with an even weaker level of approximately \u00a5185 a month earlier.<\/p>\n<\/a><\/p>\nSuch movements can alter the relative attractiveness of an imported product within a short period.<\/p>\nFor European producers, a stable euro price may still result in a significant price increase for a Japanese customer. Equally, a strengthening yen can improve purchasing conditions without any reduction in the exporter\u2019s price.<\/p>\nHayashi therefore treated currency movements as a continuing commercial variable, rather than background economic information.<\/p>\nEurope retains a major role in Japan\u2019s softwood supply<\/strong><\/p>\nJapan remains a substantial importer of softwood products, with Europe accounting for roughly half of the import volume discussed in the presentation.<\/p>\nHayashi put European softwood deliveries at around 2 million m\u00b3 a year, within a total imported softwood volume of approximately 4 million m\u00b3.<\/p>\n<\/a><\/p>\nFinland and Sweden dominate European supply, together accounting for more than 70% of the European total cited.<\/p>\n<\/a><\/p>\nThe trade covers several different product groups and end uses.<\/p>\nEuropean lamina is used in the manufacture of glued laminated products. Other supplies serve Japanese post-and-beam construction and the dimension-lumber market associated with two-by-four housing.<\/p>\nSpecies and specifications vary by application. European redwood and whitewood do not compete in precisely the same way across all products, and their exposure to substitution by Japanese species also differs.<\/p>\n<\/a><\/p>\nThis means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. 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Timber Industry News","isPartOf":{"@id":"https:\/\/www.timberindustrynews.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"thumbnailUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","datePublished":"2026-11-02T08:23:36+00:00","dateModified":"2026-11-02T21:39:51+00:00","inLanguage":"ro-RO","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/"]}]},{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","width":1536,"height":1024,"caption":"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade"},{"@type":"WebSite","@id":"https:\/\/www.timberindustrynews.com\/#website","url":"https:\/\/www.timberindustrynews.com\/","name":"\u0218tiri din industria lemnului","description":"","publisher":{"@id":"https:\/\/www.timberindustrynews.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.timberindustrynews.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"ro-RO"},{"@type":"Organization","@id":"https:\/\/www.timberindustrynews.com\/#organization","name":"\u0218tiri din industria lemnului","url":"https:\/\/www.timberindustrynews.com\/","logo":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","width":150,"height":57,"caption":"Timber Industry News"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/person\/135a1ae8119d1d1755135add5b7287ff","name":"GWMI Admin","image":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","caption":"GWMI Admin"}}]}},"_links":{"self":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/comments?post=100471"}],"version-history":[{"count":1,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions"}],"predecessor-version":[{"id":100473,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions\/100473"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media\/100472"}],"wp:attachment":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media?parent=100471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/categories?post=100471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/tags?post=100471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}](\"https:\/\/www.globalwoodmarketsinfo.com\/wp-content\/uploads\/2026\/11\/12_russia_production_2026.jpg\"){kind=link}
![<\/a><\/p>\nBeyond demand, producers face several additional constraints.<\/p>\nA stronger rouble reduces the domestic-currency proceeds of export sales. High financing costs make it difficult to invest, refinance or carry working capital. Transport restrictions and competing demands for rail capacity complicate deliveries to distant customers.<\/p>\nRail access is especially important for shipments to China. Yet the forest products industry does not necessarily receive priority when transport capacity is allocated.<\/p>\n<\/a><\/p>\nFor mills in the north-west, the loss of established European routes has also made the logistics of reaching alternative customers more difficult.<\/p>\nThese costs accumulate along the supply chain. A producer may retain access to a buyer but still face a much weaker commercial outcome once transport, financing and currency effects are included.<\/p>\n<\/a><\/p>\nMaintenance problems threaten the productive asset base<\/strong><\/p>\nKoskinen devoted particular attention to the industry\u2019s dependence on Western machinery.<\/p>\nModern Russian forestry and sawmilling operations were built partly around imported harvesting equipment, processing lines, spare parts and technical services.<\/p>\nRestricted access to those inputs creates difficulties that cannot always be resolved by finding a new supplier for an individual component.<\/p>\nSome equipment and parts continue to reach Russia through third countries or manufacturing locations outside Europe. Producers have also turned towards domestic equipment and Chinese machinery.<\/p>\nHowever, Koskinen said these alternatives do not always provide equivalent productivity or performance.<\/p>\nThe result is a gradual deterioration in the technical condition of parts of the industry. Weak profitability reduces the money available for maintenance, while procurement restrictions make maintenance harder even where funds are available.<\/p>\nThis creates a longer-term problem. A recovery in orders would not necessarily allow every mill to return immediately to its former production level or operating efficiency.<\/p>\nFinancial results show the scale of the damage<\/strong><\/p>\nThe company results presented by Koskinen indicated a substantial decline in revenue and widespread operating losses among the businesses examined.<\/p>\nSeveral mills reported deeply negative margins, with some losses reaching double-digit percentages of turnover.<\/p>\nHe also distinguished between assets previously developed and operated by Western companies and other Russian-owned operations.<\/p>\nThe former Western assets appeared, in his comparison, to have retained a stronger relative position. Their location, equipment and earlier operating standards may have helped them withstand the deterioration in market conditions.<\/p>\nNevertheless, this was a comparison within a struggling industry. Better relative performance did not mean that the underlying commercial environment was favourable.<\/p>\nJob cuts, financial distress and bankruptcies were already part of the adjustment.<\/p>\nEurope has adapted, but product markets differ<\/strong><\/p>\nKoskinen\u2019s assessment was that Europe has managed without Russian softwood lumber.<\/p>\nThe loss of that supply did not create a continuing shortage across the European softwood market. Weak construction demand and adjustments elsewhere in the supply chain have allowed the market to function without a return to its former Russian trade flows.<\/p>\n<\/a><\/p>\nHe contrasted this with birch plywood, where Russia previously supplied a much larger share of European requirements.<\/p>\nThe plywood market has different production constraints and fewer readily available substitutes. Restricted supply has therefore had a different effect on prices and profitability.<\/p>\n<\/a><\/p>\nHis comparison cautioned against applying the experience of one wood product to another. Russia\u2019s importance varies considerably by product, and the commercial consequences of losing its supply differ accordingly.<\/p>\nFor Russian sawmilling, however, the outlook remained difficult. Koskinen saw little prospect of Chinese demand quickly returning to its former peak, while the timing and conditions of any renewed European access remained uncertain.<\/p>\n<\/a><\/p>\nDomestic construction provides some support, but the industry continues to face lower export volumes, a weaker market mix, poor profitability and growing problems maintaining its assets.<\/p>\n<\/h4>\nHiroki Hayashi, Sumitomo Forestry Europe: Japan- European timber remains necessary, but competition is becoming harder<\/em><\/h4>\n<\/a>Hiroki Hayashi<\/figcaption><\/figure>\nHiroki Hayashi approached Japan\u2019s timber market from both a trading and a housing perspective.<\/p>\nSumitomo Forestry\u2019s activities span timber procurement, housebuilding and property-related businesses in Japan and overseas. That combination provided the basis for a presentation linking imported softwood demand to housing affordability, construction methods and competition from domestic species.<\/p>\nHis central assessment was that Japan remains an important market for European suppliers, but growth cannot be assumed within its traditional residential business.<\/p>\nHousing starts face long-term demographic pressure. The weak yen raises the cost of imports. Japanese species have become more competitive in applications where they can meet the required specifications.<\/p>\nAt the same time, non-residential timber construction offers opportunities that are still relatively underdeveloped.<\/p>\nDemographics constrain the housing market<\/strong><\/p>\nJapan\u2019s population is both ageing and declining.<\/p>\nHayashi cited a population of around 123 million, with approximately 30% aged 65 or above. These trends have direct consequences for household formation and the number of new homes required.<\/p>\n<\/a><\/p>\nHis presentation used a housing-start level of roughly 740,000 units as a reference point and discussed scenarios involving further declines.<\/p>\nThe pressures extend beyond population. Higher building costs, affordability constraints and changes in the housing market also affect demand.<\/p>\nWooden housing nevertheless retains a strong position within the total. Hayashi put its share at around 55\u201360% of housing units, supported by an established network of builders, component manufacturers and suppliers.<\/p>\n<\/a><\/p>\nThis provides a substantial base for timber consumption. However, a stable share within a declining housing market does not guarantee stable volumes.<\/p>\nEuropean suppliers therefore face a market in which timber can remain a preferred construction material while the total number of projects falls.<\/p>\nAffordability is weakening despite relatively low mortgage rates<\/strong><\/p>\nHayashi examined the widening gap between household incomes and housing costs.<\/p>\nSalary growth has been limited over a long period, while the cost of land and construction has increased. The pressure is particularly visible in large urban markets.<\/p>\n<\/a><\/p>\nHe pointed to strong apartment-price increases in Tokyo, where land costs, construction expenses and concentrated demand have pushed prices upwards.<\/p>\nDetached housing has, in some cases, remained relatively more accessible. Developers and housebuilders have helped control the total purchase price by reducing plot sizes and adjusting the housing offer.<\/p>\nFinancing conditions are another source of pressure.<\/p>\nJapanese mortgage rates remain relatively low compared with those in many other countries, but their direction matters. A gradual increase adds to the cost of buying a home at a time when construction and land are already expensive.<\/p>\n<\/a><\/p>\nHayashi noted that variable-rate mortgages account for a large share of the market. Changes in financing costs therefore influence purchasing decisions even when the absolute interest rate appears modest by international standards.<\/p>\nThe yen directly affects imported timber\u2019s competitiveness<\/strong><\/p>\nExchange rates are central to the relationship between Japanese buyers and European suppliers.<\/p>\nA weaker yen increases the local-currency cost of imported timber, making it harder for importers to compete against domestic material or pass higher costs through to customers.<\/p>\nHayashi cited an exchange rate of around \u00a5177 to the euro at the time of his presentation, compared with an even weaker level of approximately \u00a5185 a month earlier.<\/p>\n<\/a><\/p>\nSuch movements can alter the relative attractiveness of an imported product within a short period.<\/p>\nFor European producers, a stable euro price may still result in a significant price increase for a Japanese customer. Equally, a strengthening yen can improve purchasing conditions without any reduction in the exporter\u2019s price.<\/p>\nHayashi therefore treated currency movements as a continuing commercial variable, rather than background economic information.<\/p>\nEurope retains a major role in Japan\u2019s softwood supply<\/strong><\/p>\nJapan remains a substantial importer of softwood products, with Europe accounting for roughly half of the import volume discussed in the presentation.<\/p>\nHayashi put European softwood deliveries at around 2 million m\u00b3 a year, within a total imported softwood volume of approximately 4 million m\u00b3.<\/p>\n<\/a><\/p>\nFinland and Sweden dominate European supply, together accounting for more than 70% of the European total cited.<\/p>\n<\/a><\/p>\nThe trade covers several different product groups and end uses.<\/p>\nEuropean lamina is used in the manufacture of glued laminated products. Other supplies serve Japanese post-and-beam construction and the dimension-lumber market associated with two-by-four housing.<\/p>\nSpecies and specifications vary by application. European redwood and whitewood do not compete in precisely the same way across all products, and their exposure to substitution by Japanese species also differs.<\/p>\n<\/a><\/p>\nThis means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. 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Timber Industry News","isPartOf":{"@id":"https:\/\/www.timberindustrynews.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"thumbnailUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","datePublished":"2026-11-02T08:23:36+00:00","dateModified":"2026-11-02T21:39:51+00:00","inLanguage":"ro-RO","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/"]}]},{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","width":1536,"height":1024,"caption":"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade"},{"@type":"WebSite","@id":"https:\/\/www.timberindustrynews.com\/#website","url":"https:\/\/www.timberindustrynews.com\/","name":"\u0218tiri din industria lemnului","description":"","publisher":{"@id":"https:\/\/www.timberindustrynews.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.timberindustrynews.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"ro-RO"},{"@type":"Organization","@id":"https:\/\/www.timberindustrynews.com\/#organization","name":"\u0218tiri din industria lemnului","url":"https:\/\/www.timberindustrynews.com\/","logo":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","width":150,"height":57,"caption":"Timber Industry News"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/person\/135a1ae8119d1d1755135add5b7287ff","name":"GWMI Admin","image":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","caption":"GWMI Admin"}}]}},"_links":{"self":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/comments?post=100471"}],"version-history":[{"count":1,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions"}],"predecessor-version":[{"id":100473,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions\/100473"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media\/100472"}],"wp:attachment":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media?parent=100471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/categories?post=100471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/tags?post=100471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}](\"https:\/\/www.globalwoodmarketsinfo.com\/wp-content\/uploads\/2026\/11\/13_russia_exports_china_japan.jpg\"){kind=link}
![<\/a><\/p>\nFor mills in the north-west, the loss of established European routes has also made the logistics of reaching alternative customers more difficult.<\/p>\nThese costs accumulate along the supply chain. A producer may retain access to a buyer but still face a much weaker commercial outcome once transport, financing and currency effects are included.<\/p>\n<\/a><\/p>\nMaintenance problems threaten the productive asset base<\/strong><\/p>\nKoskinen devoted particular attention to the industry\u2019s dependence on Western machinery.<\/p>\nModern Russian forestry and sawmilling operations were built partly around imported harvesting equipment, processing lines, spare parts and technical services.<\/p>\nRestricted access to those inputs creates difficulties that cannot always be resolved by finding a new supplier for an individual component.<\/p>\nSome equipment and parts continue to reach Russia through third countries or manufacturing locations outside Europe. Producers have also turned towards domestic equipment and Chinese machinery.<\/p>\nHowever, Koskinen said these alternatives do not always provide equivalent productivity or performance.<\/p>\nThe result is a gradual deterioration in the technical condition of parts of the industry. Weak profitability reduces the money available for maintenance, while procurement restrictions make maintenance harder even where funds are available.<\/p>\nThis creates a longer-term problem. A recovery in orders would not necessarily allow every mill to return immediately to its former production level or operating efficiency.<\/p>\nFinancial results show the scale of the damage<\/strong><\/p>\nThe company results presented by Koskinen indicated a substantial decline in revenue and widespread operating losses among the businesses examined.<\/p>\nSeveral mills reported deeply negative margins, with some losses reaching double-digit percentages of turnover.<\/p>\nHe also distinguished between assets previously developed and operated by Western companies and other Russian-owned operations.<\/p>\nThe former Western assets appeared, in his comparison, to have retained a stronger relative position. Their location, equipment and earlier operating standards may have helped them withstand the deterioration in market conditions.<\/p>\nNevertheless, this was a comparison within a struggling industry. Better relative performance did not mean that the underlying commercial environment was favourable.<\/p>\nJob cuts, financial distress and bankruptcies were already part of the adjustment.<\/p>\nEurope has adapted, but product markets differ<\/strong><\/p>\nKoskinen\u2019s assessment was that Europe has managed without Russian softwood lumber.<\/p>\nThe loss of that supply did not create a continuing shortage across the European softwood market. Weak construction demand and adjustments elsewhere in the supply chain have allowed the market to function without a return to its former Russian trade flows.<\/p>\n<\/a><\/p>\nHe contrasted this with birch plywood, where Russia previously supplied a much larger share of European requirements.<\/p>\nThe plywood market has different production constraints and fewer readily available substitutes. Restricted supply has therefore had a different effect on prices and profitability.<\/p>\n<\/a><\/p>\nHis comparison cautioned against applying the experience of one wood product to another. Russia\u2019s importance varies considerably by product, and the commercial consequences of losing its supply differ accordingly.<\/p>\nFor Russian sawmilling, however, the outlook remained difficult. Koskinen saw little prospect of Chinese demand quickly returning to its former peak, while the timing and conditions of any renewed European access remained uncertain.<\/p>\n<\/a><\/p>\nDomestic construction provides some support, but the industry continues to face lower export volumes, a weaker market mix, poor profitability and growing problems maintaining its assets.<\/p>\n<\/h4>\nHiroki Hayashi, Sumitomo Forestry Europe: Japan- European timber remains necessary, but competition is becoming harder<\/em><\/h4>\n<\/a>Hiroki Hayashi<\/figcaption><\/figure>\nHiroki Hayashi approached Japan\u2019s timber market from both a trading and a housing perspective.<\/p>\nSumitomo Forestry\u2019s activities span timber procurement, housebuilding and property-related businesses in Japan and overseas. That combination provided the basis for a presentation linking imported softwood demand to housing affordability, construction methods and competition from domestic species.<\/p>\nHis central assessment was that Japan remains an important market for European suppliers, but growth cannot be assumed within its traditional residential business.<\/p>\nHousing starts face long-term demographic pressure. The weak yen raises the cost of imports. Japanese species have become more competitive in applications where they can meet the required specifications.<\/p>\nAt the same time, non-residential timber construction offers opportunities that are still relatively underdeveloped.<\/p>\nDemographics constrain the housing market<\/strong><\/p>\nJapan\u2019s population is both ageing and declining.<\/p>\nHayashi cited a population of around 123 million, with approximately 30% aged 65 or above. These trends have direct consequences for household formation and the number of new homes required.<\/p>\n<\/a><\/p>\nHis presentation used a housing-start level of roughly 740,000 units as a reference point and discussed scenarios involving further declines.<\/p>\nThe pressures extend beyond population. Higher building costs, affordability constraints and changes in the housing market also affect demand.<\/p>\nWooden housing nevertheless retains a strong position within the total. Hayashi put its share at around 55\u201360% of housing units, supported by an established network of builders, component manufacturers and suppliers.<\/p>\n<\/a><\/p>\nThis provides a substantial base for timber consumption. However, a stable share within a declining housing market does not guarantee stable volumes.<\/p>\nEuropean suppliers therefore face a market in which timber can remain a preferred construction material while the total number of projects falls.<\/p>\nAffordability is weakening despite relatively low mortgage rates<\/strong><\/p>\nHayashi examined the widening gap between household incomes and housing costs.<\/p>\nSalary growth has been limited over a long period, while the cost of land and construction has increased. The pressure is particularly visible in large urban markets.<\/p>\n<\/a><\/p>\nHe pointed to strong apartment-price increases in Tokyo, where land costs, construction expenses and concentrated demand have pushed prices upwards.<\/p>\nDetached housing has, in some cases, remained relatively more accessible. Developers and housebuilders have helped control the total purchase price by reducing plot sizes and adjusting the housing offer.<\/p>\nFinancing conditions are another source of pressure.<\/p>\nJapanese mortgage rates remain relatively low compared with those in many other countries, but their direction matters. A gradual increase adds to the cost of buying a home at a time when construction and land are already expensive.<\/p>\n<\/a><\/p>\nHayashi noted that variable-rate mortgages account for a large share of the market. Changes in financing costs therefore influence purchasing decisions even when the absolute interest rate appears modest by international standards.<\/p>\nThe yen directly affects imported timber\u2019s competitiveness<\/strong><\/p>\nExchange rates are central to the relationship between Japanese buyers and European suppliers.<\/p>\nA weaker yen increases the local-currency cost of imported timber, making it harder for importers to compete against domestic material or pass higher costs through to customers.<\/p>\nHayashi cited an exchange rate of around \u00a5177 to the euro at the time of his presentation, compared with an even weaker level of approximately \u00a5185 a month earlier.<\/p>\n<\/a><\/p>\nSuch movements can alter the relative attractiveness of an imported product within a short period.<\/p>\nFor European producers, a stable euro price may still result in a significant price increase for a Japanese customer. Equally, a strengthening yen can improve purchasing conditions without any reduction in the exporter\u2019s price.<\/p>\nHayashi therefore treated currency movements as a continuing commercial variable, rather than background economic information.<\/p>\nEurope retains a major role in Japan\u2019s softwood supply<\/strong><\/p>\nJapan remains a substantial importer of softwood products, with Europe accounting for roughly half of the import volume discussed in the presentation.<\/p>\nHayashi put European softwood deliveries at around 2 million m\u00b3 a year, within a total imported softwood volume of approximately 4 million m\u00b3.<\/p>\n<\/a><\/p>\nFinland and Sweden dominate European supply, together accounting for more than 70% of the European total cited.<\/p>\n<\/a><\/p>\nThe trade covers several different product groups and end uses.<\/p>\nEuropean lamina is used in the manufacture of glued laminated products. Other supplies serve Japanese post-and-beam construction and the dimension-lumber market associated with two-by-four housing.<\/p>\nSpecies and specifications vary by application. European redwood and whitewood do not compete in precisely the same way across all products, and their exposure to substitution by Japanese species also differs.<\/p>\n<\/a><\/p>\nThis means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. 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Timber Industry News","isPartOf":{"@id":"https:\/\/www.timberindustrynews.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"thumbnailUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","datePublished":"2026-11-02T08:23:36+00:00","dateModified":"2026-11-02T21:39:51+00:00","inLanguage":"ro-RO","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/"]}]},{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","width":1536,"height":1024,"caption":"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade"},{"@type":"WebSite","@id":"https:\/\/www.timberindustrynews.com\/#website","url":"https:\/\/www.timberindustrynews.com\/","name":"\u0218tiri din industria lemnului","description":"","publisher":{"@id":"https:\/\/www.timberindustrynews.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.timberindustrynews.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"ro-RO"},{"@type":"Organization","@id":"https:\/\/www.timberindustrynews.com\/#organization","name":"\u0218tiri din industria lemnului","url":"https:\/\/www.timberindustrynews.com\/","logo":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","width":150,"height":57,"caption":"Timber Industry News"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/person\/135a1ae8119d1d1755135add5b7287ff","name":"GWMI Admin","image":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","caption":"GWMI Admin"}}]}},"_links":{"self":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/comments?post=100471"}],"version-history":[{"count":1,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions"}],"predecessor-version":[{"id":100473,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions\/100473"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media\/100472"}],"wp:attachment":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media?parent=100471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/categories?post=100471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/tags?post=100471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}](\"https:\/\/www.globalwoodmarketsinfo.com\/wp-content\/uploads\/2026\/11\/14_russia_currency_financing.jpg\"){kind=link}
![<\/a><\/p>\nMaintenance problems threaten the productive asset base<\/strong><\/p>\nKoskinen devoted particular attention to the industry\u2019s dependence on Western machinery.<\/p>\nModern Russian forestry and sawmilling operations were built partly around imported harvesting equipment, processing lines, spare parts and technical services.<\/p>\nRestricted access to those inputs creates difficulties that cannot always be resolved by finding a new supplier for an individual component.<\/p>\nSome equipment and parts continue to reach Russia through third countries or manufacturing locations outside Europe. Producers have also turned towards domestic equipment and Chinese machinery.<\/p>\nHowever, Koskinen said these alternatives do not always provide equivalent productivity or performance.<\/p>\nThe result is a gradual deterioration in the technical condition of parts of the industry. Weak profitability reduces the money available for maintenance, while procurement restrictions make maintenance harder even where funds are available.<\/p>\nThis creates a longer-term problem. A recovery in orders would not necessarily allow every mill to return immediately to its former production level or operating efficiency.<\/p>\nFinancial results show the scale of the damage<\/strong><\/p>\nThe company results presented by Koskinen indicated a substantial decline in revenue and widespread operating losses among the businesses examined.<\/p>\nSeveral mills reported deeply negative margins, with some losses reaching double-digit percentages of turnover.<\/p>\nHe also distinguished between assets previously developed and operated by Western companies and other Russian-owned operations.<\/p>\nThe former Western assets appeared, in his comparison, to have retained a stronger relative position. Their location, equipment and earlier operating standards may have helped them withstand the deterioration in market conditions.<\/p>\nNevertheless, this was a comparison within a struggling industry. Better relative performance did not mean that the underlying commercial environment was favourable.<\/p>\nJob cuts, financial distress and bankruptcies were already part of the adjustment.<\/p>\nEurope has adapted, but product markets differ<\/strong><\/p>\nKoskinen\u2019s assessment was that Europe has managed without Russian softwood lumber.<\/p>\nThe loss of that supply did not create a continuing shortage across the European softwood market. Weak construction demand and adjustments elsewhere in the supply chain have allowed the market to function without a return to its former Russian trade flows.<\/p>\n<\/a><\/p>\nHe contrasted this with birch plywood, where Russia previously supplied a much larger share of European requirements.<\/p>\nThe plywood market has different production constraints and fewer readily available substitutes. Restricted supply has therefore had a different effect on prices and profitability.<\/p>\n<\/a><\/p>\nHis comparison cautioned against applying the experience of one wood product to another. Russia\u2019s importance varies considerably by product, and the commercial consequences of losing its supply differ accordingly.<\/p>\nFor Russian sawmilling, however, the outlook remained difficult. Koskinen saw little prospect of Chinese demand quickly returning to its former peak, while the timing and conditions of any renewed European access remained uncertain.<\/p>\n<\/a><\/p>\nDomestic construction provides some support, but the industry continues to face lower export volumes, a weaker market mix, poor profitability and growing problems maintaining its assets.<\/p>\n<\/h4>\nHiroki Hayashi, Sumitomo Forestry Europe: Japan- European timber remains necessary, but competition is becoming harder<\/em><\/h4>\n<\/a>Hiroki Hayashi<\/figcaption><\/figure>\nHiroki Hayashi approached Japan\u2019s timber market from both a trading and a housing perspective.<\/p>\nSumitomo Forestry\u2019s activities span timber procurement, housebuilding and property-related businesses in Japan and overseas. That combination provided the basis for a presentation linking imported softwood demand to housing affordability, construction methods and competition from domestic species.<\/p>\nHis central assessment was that Japan remains an important market for European suppliers, but growth cannot be assumed within its traditional residential business.<\/p>\nHousing starts face long-term demographic pressure. The weak yen raises the cost of imports. Japanese species have become more competitive in applications where they can meet the required specifications.<\/p>\nAt the same time, non-residential timber construction offers opportunities that are still relatively underdeveloped.<\/p>\nDemographics constrain the housing market<\/strong><\/p>\nJapan\u2019s population is both ageing and declining.<\/p>\nHayashi cited a population of around 123 million, with approximately 30% aged 65 or above. These trends have direct consequences for household formation and the number of new homes required.<\/p>\n<\/a><\/p>\nHis presentation used a housing-start level of roughly 740,000 units as a reference point and discussed scenarios involving further declines.<\/p>\nThe pressures extend beyond population. Higher building costs, affordability constraints and changes in the housing market also affect demand.<\/p>\nWooden housing nevertheless retains a strong position within the total. Hayashi put its share at around 55\u201360% of housing units, supported by an established network of builders, component manufacturers and suppliers.<\/p>\n<\/a><\/p>\nThis provides a substantial base for timber consumption. However, a stable share within a declining housing market does not guarantee stable volumes.<\/p>\nEuropean suppliers therefore face a market in which timber can remain a preferred construction material while the total number of projects falls.<\/p>\nAffordability is weakening despite relatively low mortgage rates<\/strong><\/p>\nHayashi examined the widening gap between household incomes and housing costs.<\/p>\nSalary growth has been limited over a long period, while the cost of land and construction has increased. The pressure is particularly visible in large urban markets.<\/p>\n<\/a><\/p>\nHe pointed to strong apartment-price increases in Tokyo, where land costs, construction expenses and concentrated demand have pushed prices upwards.<\/p>\nDetached housing has, in some cases, remained relatively more accessible. Developers and housebuilders have helped control the total purchase price by reducing plot sizes and adjusting the housing offer.<\/p>\nFinancing conditions are another source of pressure.<\/p>\nJapanese mortgage rates remain relatively low compared with those in many other countries, but their direction matters. A gradual increase adds to the cost of buying a home at a time when construction and land are already expensive.<\/p>\n<\/a><\/p>\nHayashi noted that variable-rate mortgages account for a large share of the market. Changes in financing costs therefore influence purchasing decisions even when the absolute interest rate appears modest by international standards.<\/p>\nThe yen directly affects imported timber\u2019s competitiveness<\/strong><\/p>\nExchange rates are central to the relationship between Japanese buyers and European suppliers.<\/p>\nA weaker yen increases the local-currency cost of imported timber, making it harder for importers to compete against domestic material or pass higher costs through to customers.<\/p>\nHayashi cited an exchange rate of around \u00a5177 to the euro at the time of his presentation, compared with an even weaker level of approximately \u00a5185 a month earlier.<\/p>\n<\/a><\/p>\nSuch movements can alter the relative attractiveness of an imported product within a short period.<\/p>\nFor European producers, a stable euro price may still result in a significant price increase for a Japanese customer. Equally, a strengthening yen can improve purchasing conditions without any reduction in the exporter\u2019s price.<\/p>\nHayashi therefore treated currency movements as a continuing commercial variable, rather than background economic information.<\/p>\nEurope retains a major role in Japan\u2019s softwood supply<\/strong><\/p>\nJapan remains a substantial importer of softwood products, with Europe accounting for roughly half of the import volume discussed in the presentation.<\/p>\nHayashi put European softwood deliveries at around 2 million m\u00b3 a year, within a total imported softwood volume of approximately 4 million m\u00b3.<\/p>\n<\/a><\/p>\nFinland and Sweden dominate European supply, together accounting for more than 70% of the European total cited.<\/p>\n<\/a><\/p>\nThe trade covers several different product groups and end uses.<\/p>\nEuropean lamina is used in the manufacture of glued laminated products. Other supplies serve Japanese post-and-beam construction and the dimension-lumber market associated with two-by-four housing.<\/p>\nSpecies and specifications vary by application. European redwood and whitewood do not compete in precisely the same way across all products, and their exposure to substitution by Japanese species also differs.<\/p>\n<\/a><\/p>\nThis means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. 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Timber Industry News","isPartOf":{"@id":"https:\/\/www.timberindustrynews.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"thumbnailUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","datePublished":"2026-11-02T08:23:36+00:00","dateModified":"2026-11-02T21:39:51+00:00","inLanguage":"ro-RO","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/"]}]},{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","width":1536,"height":1024,"caption":"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade"},{"@type":"WebSite","@id":"https:\/\/www.timberindustrynews.com\/#website","url":"https:\/\/www.timberindustrynews.com\/","name":"\u0218tiri din industria lemnului","description":"","publisher":{"@id":"https:\/\/www.timberindustrynews.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.timberindustrynews.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"ro-RO"},{"@type":"Organization","@id":"https:\/\/www.timberindustrynews.com\/#organization","name":"\u0218tiri din industria lemnului","url":"https:\/\/www.timberindustrynews.com\/","logo":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","width":150,"height":57,"caption":"Timber Industry News"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/person\/135a1ae8119d1d1755135add5b7287ff","name":"GWMI Admin","image":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","caption":"GWMI Admin"}}]}},"_links":{"self":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/comments?post=100471"}],"version-history":[{"count":1,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions"}],"predecessor-version":[{"id":100473,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions\/100473"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media\/100472"}],"wp:attachment":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media?parent=100471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/categories?post=100471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/tags?post=100471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}](\"https:\/\/www.globalwoodmarketsinfo.com\/wp-content\/uploads\/2026\/11\/15_russia_revenue_decline.jpg\"){kind=link}
![<\/a><\/p>\nHe contrasted this with birch plywood, where Russia previously supplied a much larger share of European requirements.<\/p>\nThe plywood market has different production constraints and fewer readily available substitutes. Restricted supply has therefore had a different effect on prices and profitability.<\/p>\n<\/a><\/p>\nHis comparison cautioned against applying the experience of one wood product to another. Russia\u2019s importance varies considerably by product, and the commercial consequences of losing its supply differ accordingly.<\/p>\nFor Russian sawmilling, however, the outlook remained difficult. Koskinen saw little prospect of Chinese demand quickly returning to its former peak, while the timing and conditions of any renewed European access remained uncertain.<\/p>\n<\/a><\/p>\nDomestic construction provides some support, but the industry continues to face lower export volumes, a weaker market mix, poor profitability and growing problems maintaining its assets.<\/p>\n<\/h4>\nHiroki Hayashi, Sumitomo Forestry Europe: Japan- European timber remains necessary, but competition is becoming harder<\/em><\/h4>\n<\/a>Hiroki Hayashi<\/figcaption><\/figure>\nHiroki Hayashi approached Japan\u2019s timber market from both a trading and a housing perspective.<\/p>\nSumitomo Forestry\u2019s activities span timber procurement, housebuilding and property-related businesses in Japan and overseas. That combination provided the basis for a presentation linking imported softwood demand to housing affordability, construction methods and competition from domestic species.<\/p>\nHis central assessment was that Japan remains an important market for European suppliers, but growth cannot be assumed within its traditional residential business.<\/p>\nHousing starts face long-term demographic pressure. The weak yen raises the cost of imports. Japanese species have become more competitive in applications where they can meet the required specifications.<\/p>\nAt the same time, non-residential timber construction offers opportunities that are still relatively underdeveloped.<\/p>\nDemographics constrain the housing market<\/strong><\/p>\nJapan\u2019s population is both ageing and declining.<\/p>\nHayashi cited a population of around 123 million, with approximately 30% aged 65 or above. These trends have direct consequences for household formation and the number of new homes required.<\/p>\n<\/a><\/p>\nHis presentation used a housing-start level of roughly 740,000 units as a reference point and discussed scenarios involving further declines.<\/p>\nThe pressures extend beyond population. Higher building costs, affordability constraints and changes in the housing market also affect demand.<\/p>\nWooden housing nevertheless retains a strong position within the total. Hayashi put its share at around 55\u201360% of housing units, supported by an established network of builders, component manufacturers and suppliers.<\/p>\n<\/a><\/p>\nThis provides a substantial base for timber consumption. However, a stable share within a declining housing market does not guarantee stable volumes.<\/p>\nEuropean suppliers therefore face a market in which timber can remain a preferred construction material while the total number of projects falls.<\/p>\nAffordability is weakening despite relatively low mortgage rates<\/strong><\/p>\nHayashi examined the widening gap between household incomes and housing costs.<\/p>\nSalary growth has been limited over a long period, while the cost of land and construction has increased. The pressure is particularly visible in large urban markets.<\/p>\n<\/a><\/p>\nHe pointed to strong apartment-price increases in Tokyo, where land costs, construction expenses and concentrated demand have pushed prices upwards.<\/p>\nDetached housing has, in some cases, remained relatively more accessible. Developers and housebuilders have helped control the total purchase price by reducing plot sizes and adjusting the housing offer.<\/p>\nFinancing conditions are another source of pressure.<\/p>\nJapanese mortgage rates remain relatively low compared with those in many other countries, but their direction matters. A gradual increase adds to the cost of buying a home at a time when construction and land are already expensive.<\/p>\n<\/a><\/p>\nHayashi noted that variable-rate mortgages account for a large share of the market. Changes in financing costs therefore influence purchasing decisions even when the absolute interest rate appears modest by international standards.<\/p>\nThe yen directly affects imported timber\u2019s competitiveness<\/strong><\/p>\nExchange rates are central to the relationship between Japanese buyers and European suppliers.<\/p>\nA weaker yen increases the local-currency cost of imported timber, making it harder for importers to compete against domestic material or pass higher costs through to customers.<\/p>\nHayashi cited an exchange rate of around \u00a5177 to the euro at the time of his presentation, compared with an even weaker level of approximately \u00a5185 a month earlier.<\/p>\n<\/a><\/p>\nSuch movements can alter the relative attractiveness of an imported product within a short period.<\/p>\nFor European producers, a stable euro price may still result in a significant price increase for a Japanese customer. Equally, a strengthening yen can improve purchasing conditions without any reduction in the exporter\u2019s price.<\/p>\nHayashi therefore treated currency movements as a continuing commercial variable, rather than background economic information.<\/p>\nEurope retains a major role in Japan\u2019s softwood supply<\/strong><\/p>\nJapan remains a substantial importer of softwood products, with Europe accounting for roughly half of the import volume discussed in the presentation.<\/p>\nHayashi put European softwood deliveries at around 2 million m\u00b3 a year, within a total imported softwood volume of approximately 4 million m\u00b3.<\/p>\n<\/a><\/p>\nFinland and Sweden dominate European supply, together accounting for more than 70% of the European total cited.<\/p>\n<\/a><\/p>\nThe trade covers several different product groups and end uses.<\/p>\nEuropean lamina is used in the manufacture of glued laminated products. Other supplies serve Japanese post-and-beam construction and the dimension-lumber market associated with two-by-four housing.<\/p>\nSpecies and specifications vary by application. European redwood and whitewood do not compete in precisely the same way across all products, and their exposure to substitution by Japanese species also differs.<\/p>\n<\/a><\/p>\nThis means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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![<\/a><\/p>\nHis comparison cautioned against applying the experience of one wood product to another. Russia\u2019s importance varies considerably by product, and the commercial consequences of losing its supply differ accordingly.<\/p>\nFor Russian sawmilling, however, the outlook remained difficult. Koskinen saw little prospect of Chinese demand quickly returning to its former peak, while the timing and conditions of any renewed European access remained uncertain.<\/p>\n<\/a><\/p>\nDomestic construction provides some support, but the industry continues to face lower export volumes, a weaker market mix, poor profitability and growing problems maintaining its assets.<\/p>\n<\/h4>\nHiroki Hayashi, Sumitomo Forestry Europe: Japan- European timber remains necessary, but competition is becoming harder<\/em><\/h4>\n<\/a>Hiroki Hayashi<\/figcaption><\/figure>\nHiroki Hayashi approached Japan\u2019s timber market from both a trading and a housing perspective.<\/p>\nSumitomo Forestry\u2019s activities span timber procurement, housebuilding and property-related businesses in Japan and overseas. That combination provided the basis for a presentation linking imported softwood demand to housing affordability, construction methods and competition from domestic species.<\/p>\nHis central assessment was that Japan remains an important market for European suppliers, but growth cannot be assumed within its traditional residential business.<\/p>\nHousing starts face long-term demographic pressure. The weak yen raises the cost of imports. Japanese species have become more competitive in applications where they can meet the required specifications.<\/p>\nAt the same time, non-residential timber construction offers opportunities that are still relatively underdeveloped.<\/p>\nDemographics constrain the housing market<\/strong><\/p>\nJapan\u2019s population is both ageing and declining.<\/p>\nHayashi cited a population of around 123 million, with approximately 30% aged 65 or above. These trends have direct consequences for household formation and the number of new homes required.<\/p>\n<\/a><\/p>\nHis presentation used a housing-start level of roughly 740,000 units as a reference point and discussed scenarios involving further declines.<\/p>\nThe pressures extend beyond population. Higher building costs, affordability constraints and changes in the housing market also affect demand.<\/p>\nWooden housing nevertheless retains a strong position within the total. Hayashi put its share at around 55\u201360% of housing units, supported by an established network of builders, component manufacturers and suppliers.<\/p>\n<\/a><\/p>\nThis provides a substantial base for timber consumption. However, a stable share within a declining housing market does not guarantee stable volumes.<\/p>\nEuropean suppliers therefore face a market in which timber can remain a preferred construction material while the total number of projects falls.<\/p>\nAffordability is weakening despite relatively low mortgage rates<\/strong><\/p>\nHayashi examined the widening gap between household incomes and housing costs.<\/p>\nSalary growth has been limited over a long period, while the cost of land and construction has increased. The pressure is particularly visible in large urban markets.<\/p>\n<\/a><\/p>\nHe pointed to strong apartment-price increases in Tokyo, where land costs, construction expenses and concentrated demand have pushed prices upwards.<\/p>\nDetached housing has, in some cases, remained relatively more accessible. Developers and housebuilders have helped control the total purchase price by reducing plot sizes and adjusting the housing offer.<\/p>\nFinancing conditions are another source of pressure.<\/p>\nJapanese mortgage rates remain relatively low compared with those in many other countries, but their direction matters. A gradual increase adds to the cost of buying a home at a time when construction and land are already expensive.<\/p>\n<\/a><\/p>\nHayashi noted that variable-rate mortgages account for a large share of the market. Changes in financing costs therefore influence purchasing decisions even when the absolute interest rate appears modest by international standards.<\/p>\nThe yen directly affects imported timber\u2019s competitiveness<\/strong><\/p>\nExchange rates are central to the relationship between Japanese buyers and European suppliers.<\/p>\nA weaker yen increases the local-currency cost of imported timber, making it harder for importers to compete against domestic material or pass higher costs through to customers.<\/p>\nHayashi cited an exchange rate of around \u00a5177 to the euro at the time of his presentation, compared with an even weaker level of approximately \u00a5185 a month earlier.<\/p>\n<\/a><\/p>\nSuch movements can alter the relative attractiveness of an imported product within a short period.<\/p>\nFor European producers, a stable euro price may still result in a significant price increase for a Japanese customer. Equally, a strengthening yen can improve purchasing conditions without any reduction in the exporter\u2019s price.<\/p>\nHayashi therefore treated currency movements as a continuing commercial variable, rather than background economic information.<\/p>\nEurope retains a major role in Japan\u2019s softwood supply<\/strong><\/p>\nJapan remains a substantial importer of softwood products, with Europe accounting for roughly half of the import volume discussed in the presentation.<\/p>\nHayashi put European softwood deliveries at around 2 million m\u00b3 a year, within a total imported softwood volume of approximately 4 million m\u00b3.<\/p>\n<\/a><\/p>\nFinland and Sweden dominate European supply, together accounting for more than 70% of the European total cited.<\/p>\n<\/a><\/p>\nThe trade covers several different product groups and end uses.<\/p>\nEuropean lamina is used in the manufacture of glued laminated products. Other supplies serve Japanese post-and-beam construction and the dimension-lumber market associated with two-by-four housing.<\/p>\nSpecies and specifications vary by application. European redwood and whitewood do not compete in precisely the same way across all products, and their exposure to substitution by Japanese species also differs.<\/p>\n<\/a><\/p>\nThis means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:site_name\" content=\"Timber Industry News\" \/>\n<meta property=\"article:published_time\" content=\"2026-11-02T08:23:36+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-11-02T21:39:51+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1536\" \/>\n\t<meta property=\"og:image:height\" content=\"1024\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"GWMI Admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Scris de\" \/>\n\t<meta name=\"twitter:data1\" content=\"GWMI Admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Timp estimat pentru citire\" \/>\n\t<meta name=\"twitter:data2\" content=\"30 de minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.timberindustrynews.com\\\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.timberindustrynews.com\\\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\\\/\"},\"author\":{\"name\":\"GWMI Admin\",\"@id\":\"https:\\\/\\\/www.timberindustrynews.com\\\/#\\\/schema\\\/person\\\/135a1ae8119d1d1755135add5b7287ff\"},\"headline\":\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade\",\"datePublished\":\"2026-11-02T08:23:36+00:00\",\"dateModified\":\"2026-11-02T21:39:51+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.timberindustrynews.com\\\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\\\/\"},\"wordCount\":5964,\"publisher\":{\"@id\":\"https:\\\/\\\/www.timberindustrynews.com\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/www.timberindustrynews.com\\\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.timberindustrynews.com\\\/wp-content\\\/uploads\\\/2026\\\/11\\\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png\",\"articleSection\":[\"Uncategorized\"],\"inLanguage\":\"ro-RO\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.timberindustrynews.com\\\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\\\/\",\"url\":\"https:\\\/\\\/www.timberindustrynews.com\\\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\\\/\",\"name\":\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - 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![<\/a>Hiroki Hayashi<\/figcaption><\/figure>\nHiroki Hayashi approached Japan\u2019s timber market from both a trading and a housing perspective.<\/p>\nSumitomo Forestry\u2019s activities span timber procurement, housebuilding and property-related businesses in Japan and overseas. That combination provided the basis for a presentation linking imported softwood demand to housing affordability, construction methods and competition from domestic species.<\/p>\nHis central assessment was that Japan remains an important market for European suppliers, but growth cannot be assumed within its traditional residential business.<\/p>\nHousing starts face long-term demographic pressure. The weak yen raises the cost of imports. Japanese species have become more competitive in applications where they can meet the required specifications.<\/p>\nAt the same time, non-residential timber construction offers opportunities that are still relatively underdeveloped.<\/p>\nDemographics constrain the housing market<\/strong><\/p>\nJapan\u2019s population is both ageing and declining.<\/p>\nHayashi cited a population of around 123 million, with approximately 30% aged 65 or above. These trends have direct consequences for household formation and the number of new homes required.<\/p>\n<\/a><\/p>\nHis presentation used a housing-start level of roughly 740,000 units as a reference point and discussed scenarios involving further declines.<\/p>\nThe pressures extend beyond population. Higher building costs, affordability constraints and changes in the housing market also affect demand.<\/p>\nWooden housing nevertheless retains a strong position within the total. Hayashi put its share at around 55\u201360% of housing units, supported by an established network of builders, component manufacturers and suppliers.<\/p>\n<\/a><\/p>\nThis provides a substantial base for timber consumption. However, a stable share within a declining housing market does not guarantee stable volumes.<\/p>\nEuropean suppliers therefore face a market in which timber can remain a preferred construction material while the total number of projects falls.<\/p>\nAffordability is weakening despite relatively low mortgage rates<\/strong><\/p>\nHayashi examined the widening gap between household incomes and housing costs.<\/p>\nSalary growth has been limited over a long period, while the cost of land and construction has increased. The pressure is particularly visible in large urban markets.<\/p>\n<\/a><\/p>\nHe pointed to strong apartment-price increases in Tokyo, where land costs, construction expenses and concentrated demand have pushed prices upwards.<\/p>\nDetached housing has, in some cases, remained relatively more accessible. Developers and housebuilders have helped control the total purchase price by reducing plot sizes and adjusting the housing offer.<\/p>\nFinancing conditions are another source of pressure.<\/p>\nJapanese mortgage rates remain relatively low compared with those in many other countries, but their direction matters. A gradual increase adds to the cost of buying a home at a time when construction and land are already expensive.<\/p>\n<\/a><\/p>\nHayashi noted that variable-rate mortgages account for a large share of the market. Changes in financing costs therefore influence purchasing decisions even when the absolute interest rate appears modest by international standards.<\/p>\nThe yen directly affects imported timber\u2019s competitiveness<\/strong><\/p>\nExchange rates are central to the relationship between Japanese buyers and European suppliers.<\/p>\nA weaker yen increases the local-currency cost of imported timber, making it harder for importers to compete against domestic material or pass higher costs through to customers.<\/p>\nHayashi cited an exchange rate of around \u00a5177 to the euro at the time of his presentation, compared with an even weaker level of approximately \u00a5185 a month earlier.<\/p>\n<\/a><\/p>\nSuch movements can alter the relative attractiveness of an imported product within a short period.<\/p>\nFor European producers, a stable euro price may still result in a significant price increase for a Japanese customer. Equally, a strengthening yen can improve purchasing conditions without any reduction in the exporter\u2019s price.<\/p>\nHayashi therefore treated currency movements as a continuing commercial variable, rather than background economic information.<\/p>\nEurope retains a major role in Japan\u2019s softwood supply<\/strong><\/p>\nJapan remains a substantial importer of softwood products, with Europe accounting for roughly half of the import volume discussed in the presentation.<\/p>\nHayashi put European softwood deliveries at around 2 million m\u00b3 a year, within a total imported softwood volume of approximately 4 million m\u00b3.<\/p>\n<\/a><\/p>\nFinland and Sweden dominate European supply, together accounting for more than 70% of the European total cited.<\/p>\n<\/a><\/p>\nThe trade covers several different product groups and end uses.<\/p>\nEuropean lamina is used in the manufacture of glued laminated products. Other supplies serve Japanese post-and-beam construction and the dimension-lumber market associated with two-by-four housing.<\/p>\nSpecies and specifications vary by application. European redwood and whitewood do not compete in precisely the same way across all products, and their exposure to substitution by Japanese species also differs.<\/p>\n<\/a><\/p>\nThis means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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Timber Industry News","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/","og_locale":"ro_RO","og_type":"article","og_title":"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News","og_description":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →","og_url":"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/","og_site_name":"Timber Industry News","article_published_time":"2026-11-02T08:23:36+00:00","article_modified_time":"2026-11-02T21:39:51+00:00","og_image":[{"width":1536,"height":1024,"url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","type":"image\/png"}],"author":"GWMI Admin","twitter_card":"summary_large_image","twitter_misc":{"Scris de":"GWMI Admin","Timp estimat pentru citire":"30 de minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#article","isPartOf":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/"},"author":{"name":"GWMI Admin","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/person\/135a1ae8119d1d1755135add5b7287ff"},"headline":"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade","datePublished":"2026-11-02T08:23:36+00:00","dateModified":"2026-11-02T21:39:51+00:00","mainEntityOfPage":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/"},"wordCount":5964,"publisher":{"@id":"https:\/\/www.timberindustrynews.com\/#organization"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"thumbnailUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","articleSection":["Uncategorized"],"inLanguage":"ro-RO"},{"@type":"WebPage","@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/","url":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/","name":"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News","isPartOf":{"@id":"https:\/\/www.timberindustrynews.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"thumbnailUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","datePublished":"2026-11-02T08:23:36+00:00","dateModified":"2026-11-02T21:39:51+00:00","inLanguage":"ro-RO","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/"]}]},{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","width":1536,"height":1024,"caption":"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade"},{"@type":"WebSite","@id":"https:\/\/www.timberindustrynews.com\/#website","url":"https:\/\/www.timberindustrynews.com\/","name":"\u0218tiri din industria lemnului","description":"","publisher":{"@id":"https:\/\/www.timberindustrynews.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.timberindustrynews.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"ro-RO"},{"@type":"Organization","@id":"https:\/\/www.timberindustrynews.com\/#organization","name":"\u0218tiri din industria lemnului","url":"https:\/\/www.timberindustrynews.com\/","logo":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","width":150,"height":57,"caption":"Timber Industry News"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/person\/135a1ae8119d1d1755135add5b7287ff","name":"GWMI Admin","image":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","caption":"GWMI Admin"}}]}},"_links":{"self":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/comments?post=100471"}],"version-history":[{"count":1,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions"}],"predecessor-version":[{"id":100473,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions\/100473"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media\/100472"}],"wp:attachment":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media?parent=100471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/categories?post=100471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/tags?post=100471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}](\"https:\/\/www.globalwoodmarketsinfo.com\/wp-content\/uploads\/2026\/11\/Hiroki-Hayashi.png\"){kind=link}
![<\/a><\/p>\nHis presentation used a housing-start level of roughly 740,000 units as a reference point and discussed scenarios involving further declines.<\/p>\nThe pressures extend beyond population. Higher building costs, affordability constraints and changes in the housing market also affect demand.<\/p>\nWooden housing nevertheless retains a strong position within the total. Hayashi put its share at around 55\u201360% of housing units, supported by an established network of builders, component manufacturers and suppliers.<\/p>\n<\/a><\/p>\nThis provides a substantial base for timber consumption. However, a stable share within a declining housing market does not guarantee stable volumes.<\/p>\nEuropean suppliers therefore face a market in which timber can remain a preferred construction material while the total number of projects falls.<\/p>\nAffordability is weakening despite relatively low mortgage rates<\/strong><\/p>\nHayashi examined the widening gap between household incomes and housing costs.<\/p>\nSalary growth has been limited over a long period, while the cost of land and construction has increased. The pressure is particularly visible in large urban markets.<\/p>\n<\/a><\/p>\nHe pointed to strong apartment-price increases in Tokyo, where land costs, construction expenses and concentrated demand have pushed prices upwards.<\/p>\nDetached housing has, in some cases, remained relatively more accessible. Developers and housebuilders have helped control the total purchase price by reducing plot sizes and adjusting the housing offer.<\/p>\nFinancing conditions are another source of pressure.<\/p>\nJapanese mortgage rates remain relatively low compared with those in many other countries, but their direction matters. A gradual increase adds to the cost of buying a home at a time when construction and land are already expensive.<\/p>\n<\/a><\/p>\nHayashi noted that variable-rate mortgages account for a large share of the market. Changes in financing costs therefore influence purchasing decisions even when the absolute interest rate appears modest by international standards.<\/p>\nThe yen directly affects imported timber\u2019s competitiveness<\/strong><\/p>\nExchange rates are central to the relationship between Japanese buyers and European suppliers.<\/p>\nA weaker yen increases the local-currency cost of imported timber, making it harder for importers to compete against domestic material or pass higher costs through to customers.<\/p>\nHayashi cited an exchange rate of around \u00a5177 to the euro at the time of his presentation, compared with an even weaker level of approximately \u00a5185 a month earlier.<\/p>\n<\/a><\/p>\nSuch movements can alter the relative attractiveness of an imported product within a short period.<\/p>\nFor European producers, a stable euro price may still result in a significant price increase for a Japanese customer. Equally, a strengthening yen can improve purchasing conditions without any reduction in the exporter\u2019s price.<\/p>\nHayashi therefore treated currency movements as a continuing commercial variable, rather than background economic information.<\/p>\nEurope retains a major role in Japan\u2019s softwood supply<\/strong><\/p>\nJapan remains a substantial importer of softwood products, with Europe accounting for roughly half of the import volume discussed in the presentation.<\/p>\nHayashi put European softwood deliveries at around 2 million m\u00b3 a year, within a total imported softwood volume of approximately 4 million m\u00b3.<\/p>\n<\/a><\/p>\nFinland and Sweden dominate European supply, together accounting for more than 70% of the European total cited.<\/p>\n<\/a><\/p>\nThe trade covers several different product groups and end uses.<\/p>\nEuropean lamina is used in the manufacture of glued laminated products. Other supplies serve Japanese post-and-beam construction and the dimension-lumber market associated with two-by-four housing.<\/p>\nSpecies and specifications vary by application. European redwood and whitewood do not compete in precisely the same way across all products, and their exposure to substitution by Japanese species also differs.<\/p>\n<\/a><\/p>\nThis means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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![<\/a><\/p>\nThis provides a substantial base for timber consumption. However, a stable share within a declining housing market does not guarantee stable volumes.<\/p>\nEuropean suppliers therefore face a market in which timber can remain a preferred construction material while the total number of projects falls.<\/p>\nAffordability is weakening despite relatively low mortgage rates<\/strong><\/p>\nHayashi examined the widening gap between household incomes and housing costs.<\/p>\nSalary growth has been limited over a long period, while the cost of land and construction has increased. The pressure is particularly visible in large urban markets.<\/p>\n<\/a><\/p>\nHe pointed to strong apartment-price increases in Tokyo, where land costs, construction expenses and concentrated demand have pushed prices upwards.<\/p>\nDetached housing has, in some cases, remained relatively more accessible. Developers and housebuilders have helped control the total purchase price by reducing plot sizes and adjusting the housing offer.<\/p>\nFinancing conditions are another source of pressure.<\/p>\nJapanese mortgage rates remain relatively low compared with those in many other countries, but their direction matters. A gradual increase adds to the cost of buying a home at a time when construction and land are already expensive.<\/p>\n<\/a><\/p>\nHayashi noted that variable-rate mortgages account for a large share of the market. Changes in financing costs therefore influence purchasing decisions even when the absolute interest rate appears modest by international standards.<\/p>\nThe yen directly affects imported timber\u2019s competitiveness<\/strong><\/p>\nExchange rates are central to the relationship between Japanese buyers and European suppliers.<\/p>\nA weaker yen increases the local-currency cost of imported timber, making it harder for importers to compete against domestic material or pass higher costs through to customers.<\/p>\nHayashi cited an exchange rate of around \u00a5177 to the euro at the time of his presentation, compared with an even weaker level of approximately \u00a5185 a month earlier.<\/p>\n<\/a><\/p>\nSuch movements can alter the relative attractiveness of an imported product within a short period.<\/p>\nFor European producers, a stable euro price may still result in a significant price increase for a Japanese customer. Equally, a strengthening yen can improve purchasing conditions without any reduction in the exporter\u2019s price.<\/p>\nHayashi therefore treated currency movements as a continuing commercial variable, rather than background economic information.<\/p>\nEurope retains a major role in Japan\u2019s softwood supply<\/strong><\/p>\nJapan remains a substantial importer of softwood products, with Europe accounting for roughly half of the import volume discussed in the presentation.<\/p>\nHayashi put European softwood deliveries at around 2 million m\u00b3 a year, within a total imported softwood volume of approximately 4 million m\u00b3.<\/p>\n<\/a><\/p>\nFinland and Sweden dominate European supply, together accounting for more than 70% of the European total cited.<\/p>\n<\/a><\/p>\nThe trade covers several different product groups and end uses.<\/p>\nEuropean lamina is used in the manufacture of glued laminated products. Other supplies serve Japanese post-and-beam construction and the dimension-lumber market associated with two-by-four housing.<\/p>\nSpecies and specifications vary by application. European redwood and whitewood do not compete in precisely the same way across all products, and their exposure to substitution by Japanese species also differs.<\/p>\n<\/a><\/p>\nThis means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:site_name\" content=\"Timber Industry News\" \/>\n<meta property=\"article:published_time\" content=\"2026-11-02T08:23:36+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-11-02T21:39:51+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1536\" \/>\n\t<meta property=\"og:image:height\" content=\"1024\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"GWMI Admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Scris de\" \/>\n\t<meta name=\"twitter:data1\" content=\"GWMI Admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Timp estimat pentru citire\" \/>\n\t<meta name=\"twitter:data2\" content=\"30 de minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.timberindustrynews.com\\\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.timberindustrynews.com\\\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\\\/\"},\"author\":{\"name\":\"GWMI Admin\",\"@id\":\"https:\\\/\\\/www.timberindustrynews.com\\\/#\\\/schema\\\/person\\\/135a1ae8119d1d1755135add5b7287ff\"},\"headline\":\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade\",\"datePublished\":\"2026-11-02T08:23:36+00:00\",\"dateModified\":\"2026-11-02T21:39:51+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.timberindustrynews.com\\\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\\\/\"},\"wordCount\":5964,\"publisher\":{\"@id\":\"https:\\\/\\\/www.timberindustrynews.com\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/www.timberindustrynews.com\\\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.timberindustrynews.com\\\/wp-content\\\/uploads\\\/2026\\\/11\\\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png\",\"articleSection\":[\"Uncategorized\"],\"inLanguage\":\"ro-RO\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.timberindustrynews.com\\\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\\\/\",\"url\":\"https:\\\/\\\/www.timberindustrynews.com\\\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\\\/\",\"name\":\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - 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![<\/a><\/p>\nHe pointed to strong apartment-price increases in Tokyo, where land costs, construction expenses and concentrated demand have pushed prices upwards.<\/p>\nDetached housing has, in some cases, remained relatively more accessible. Developers and housebuilders have helped control the total purchase price by reducing plot sizes and adjusting the housing offer.<\/p>\nFinancing conditions are another source of pressure.<\/p>\nJapanese mortgage rates remain relatively low compared with those in many other countries, but their direction matters. A gradual increase adds to the cost of buying a home at a time when construction and land are already expensive.<\/p>\n<\/a><\/p>\nHayashi noted that variable-rate mortgages account for a large share of the market. Changes in financing costs therefore influence purchasing decisions even when the absolute interest rate appears modest by international standards.<\/p>\nThe yen directly affects imported timber\u2019s competitiveness<\/strong><\/p>\nExchange rates are central to the relationship between Japanese buyers and European suppliers.<\/p>\nA weaker yen increases the local-currency cost of imported timber, making it harder for importers to compete against domestic material or pass higher costs through to customers.<\/p>\nHayashi cited an exchange rate of around \u00a5177 to the euro at the time of his presentation, compared with an even weaker level of approximately \u00a5185 a month earlier.<\/p>\n<\/a><\/p>\nSuch movements can alter the relative attractiveness of an imported product within a short period.<\/p>\nFor European producers, a stable euro price may still result in a significant price increase for a Japanese customer. Equally, a strengthening yen can improve purchasing conditions without any reduction in the exporter\u2019s price.<\/p>\nHayashi therefore treated currency movements as a continuing commercial variable, rather than background economic information.<\/p>\nEurope retains a major role in Japan\u2019s softwood supply<\/strong><\/p>\nJapan remains a substantial importer of softwood products, with Europe accounting for roughly half of the import volume discussed in the presentation.<\/p>\nHayashi put European softwood deliveries at around 2 million m\u00b3 a year, within a total imported softwood volume of approximately 4 million m\u00b3.<\/p>\n<\/a><\/p>\nFinland and Sweden dominate European supply, together accounting for more than 70% of the European total cited.<\/p>\n<\/a><\/p>\nThe trade covers several different product groups and end uses.<\/p>\nEuropean lamina is used in the manufacture of glued laminated products. Other supplies serve Japanese post-and-beam construction and the dimension-lumber market associated with two-by-four housing.<\/p>\nSpecies and specifications vary by application. European redwood and whitewood do not compete in precisely the same way across all products, and their exposure to substitution by Japanese species also differs.<\/p>\n<\/a><\/p>\nThis means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →","og_url":"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/","og_site_name":"Timber Industry News","article_published_time":"2026-11-02T08:23:36+00:00","article_modified_time":"2026-11-02T21:39:51+00:00","og_image":[{"width":1536,"height":1024,"url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","type":"image\/png"}],"author":"GWMI Admin","twitter_card":"summary_large_image","twitter_misc":{"Scris de":"GWMI Admin","Timp estimat pentru citire":"30 de minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#article","isPartOf":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/"},"author":{"name":"GWMI Admin","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/person\/135a1ae8119d1d1755135add5b7287ff"},"headline":"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade","datePublished":"2026-11-02T08:23:36+00:00","dateModified":"2026-11-02T21:39:51+00:00","mainEntityOfPage":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/"},"wordCount":5964,"publisher":{"@id":"https:\/\/www.timberindustrynews.com\/#organization"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"thumbnailUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","articleSection":["Uncategorized"],"inLanguage":"ro-RO"},{"@type":"WebPage","@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/","url":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/","name":"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News","isPartOf":{"@id":"https:\/\/www.timberindustrynews.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"thumbnailUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","datePublished":"2026-11-02T08:23:36+00:00","dateModified":"2026-11-02T21:39:51+00:00","inLanguage":"ro-RO","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/"]}]},{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","width":1536,"height":1024,"caption":"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade"},{"@type":"WebSite","@id":"https:\/\/www.timberindustrynews.com\/#website","url":"https:\/\/www.timberindustrynews.com\/","name":"\u0218tiri din industria lemnului","description":"","publisher":{"@id":"https:\/\/www.timberindustrynews.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.timberindustrynews.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"ro-RO"},{"@type":"Organization","@id":"https:\/\/www.timberindustrynews.com\/#organization","name":"\u0218tiri din industria lemnului","url":"https:\/\/www.timberindustrynews.com\/","logo":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","width":150,"height":57,"caption":"Timber Industry News"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/person\/135a1ae8119d1d1755135add5b7287ff","name":"GWMI Admin","image":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","caption":"GWMI Admin"}}]}},"_links":{"self":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/comments?post=100471"}],"version-history":[{"count":1,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions"}],"predecessor-version":[{"id":100473,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions\/100473"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media\/100472"}],"wp:attachment":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media?parent=100471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/categories?post=100471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/tags?post=100471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}](\"https:\/\/www.globalwoodmarketsinfo.com\/wp-content\/uploads\/2026\/11\/21_japan_affordability.jpg\"){kind=link}
![<\/a><\/p>\nHayashi noted that variable-rate mortgages account for a large share of the market. Changes in financing costs therefore influence purchasing decisions even when the absolute interest rate appears modest by international standards.<\/p>\nThe yen directly affects imported timber\u2019s competitiveness<\/strong><\/p>\nExchange rates are central to the relationship between Japanese buyers and European suppliers.<\/p>\nA weaker yen increases the local-currency cost of imported timber, making it harder for importers to compete against domestic material or pass higher costs through to customers.<\/p>\nHayashi cited an exchange rate of around \u00a5177 to the euro at the time of his presentation, compared with an even weaker level of approximately \u00a5185 a month earlier.<\/p>\n<\/a><\/p>\nSuch movements can alter the relative attractiveness of an imported product within a short period.<\/p>\nFor European producers, a stable euro price may still result in a significant price increase for a Japanese customer. Equally, a strengthening yen can improve purchasing conditions without any reduction in the exporter\u2019s price.<\/p>\nHayashi therefore treated currency movements as a continuing commercial variable, rather than background economic information.<\/p>\nEurope retains a major role in Japan\u2019s softwood supply<\/strong><\/p>\nJapan remains a substantial importer of softwood products, with Europe accounting for roughly half of the import volume discussed in the presentation.<\/p>\nHayashi put European softwood deliveries at around 2 million m\u00b3 a year, within a total imported softwood volume of approximately 4 million m\u00b3.<\/p>\n<\/a><\/p>\nFinland and Sweden dominate European supply, together accounting for more than 70% of the European total cited.<\/p>\n<\/a><\/p>\nThe trade covers several different product groups and end uses.<\/p>\nEuropean lamina is used in the manufacture of glued laminated products. Other supplies serve Japanese post-and-beam construction and the dimension-lumber market associated with two-by-four housing.<\/p>\nSpecies and specifications vary by application. European redwood and whitewood do not compete in precisely the same way across all products, and their exposure to substitution by Japanese species also differs.<\/p>\n<\/a><\/p>\nThis means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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![<\/a><\/p>\nSuch movements can alter the relative attractiveness of an imported product within a short period.<\/p>\nFor European producers, a stable euro price may still result in a significant price increase for a Japanese customer. Equally, a strengthening yen can improve purchasing conditions without any reduction in the exporter\u2019s price.<\/p>\nHayashi therefore treated currency movements as a continuing commercial variable, rather than background economic information.<\/p>\nEurope retains a major role in Japan\u2019s softwood supply<\/strong><\/p>\nJapan remains a substantial importer of softwood products, with Europe accounting for roughly half of the import volume discussed in the presentation.<\/p>\nHayashi put European softwood deliveries at around 2 million m\u00b3 a year, within a total imported softwood volume of approximately 4 million m\u00b3.<\/p>\n<\/a><\/p>\nFinland and Sweden dominate European supply, together accounting for more than 70% of the European total cited.<\/p>\n<\/a><\/p>\nThe trade covers several different product groups and end uses.<\/p>\nEuropean lamina is used in the manufacture of glued laminated products. Other supplies serve Japanese post-and-beam construction and the dimension-lumber market associated with two-by-four housing.<\/p>\nSpecies and specifications vary by application. European redwood and whitewood do not compete in precisely the same way across all products, and their exposure to substitution by Japanese species also differs.<\/p>\n<\/a><\/p>\nThis means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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Timber Industry News","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/","og_locale":"ro_RO","og_type":"article","og_title":"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News","og_description":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →","og_url":"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/","og_site_name":"Timber Industry News","article_published_time":"2026-11-02T08:23:36+00:00","article_modified_time":"2026-11-02T21:39:51+00:00","og_image":[{"width":1536,"height":1024,"url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","type":"image\/png"}],"author":"GWMI Admin","twitter_card":"summary_large_image","twitter_misc":{"Scris de":"GWMI Admin","Timp estimat pentru citire":"30 de minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#article","isPartOf":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/"},"author":{"name":"GWMI Admin","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/person\/135a1ae8119d1d1755135add5b7287ff"},"headline":"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade","datePublished":"2026-11-02T08:23:36+00:00","dateModified":"2026-11-02T21:39:51+00:00","mainEntityOfPage":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/"},"wordCount":5964,"publisher":{"@id":"https:\/\/www.timberindustrynews.com\/#organization"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"thumbnailUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","articleSection":["Uncategorized"],"inLanguage":"ro-RO"},{"@type":"WebPage","@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/","url":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/","name":"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - 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![<\/a><\/p>\nFinland and Sweden dominate European supply, together accounting for more than 70% of the European total cited.<\/p>\n<\/a><\/p>\nThe trade covers several different product groups and end uses.<\/p>\nEuropean lamina is used in the manufacture of glued laminated products. Other supplies serve Japanese post-and-beam construction and the dimension-lumber market associated with two-by-four housing.<\/p>\nSpecies and specifications vary by application. European redwood and whitewood do not compete in precisely the same way across all products, and their exposure to substitution by Japanese species also differs.<\/p>\n<\/a><\/p>\nThis means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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![<\/a><\/p>\nThe trade covers several different product groups and end uses.<\/p>\nEuropean lamina is used in the manufacture of glued laminated products. Other supplies serve Japanese post-and-beam construction and the dimension-lumber market associated with two-by-four housing.<\/p>\nSpecies and specifications vary by application. European redwood and whitewood do not compete in precisely the same way across all products, and their exposure to substitution by Japanese species also differs.<\/p>\n<\/a><\/p>\nThis means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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Timber Industry News","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/","og_locale":"ro_RO","og_type":"article","og_title":"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News","og_description":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →","og_url":"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/","og_site_name":"Timber Industry News","article_published_time":"2026-11-02T08:23:36+00:00","article_modified_time":"2026-11-02T21:39:51+00:00","og_image":[{"width":1536,"height":1024,"url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","type":"image\/png"}],"author":"GWMI Admin","twitter_card":"summary_large_image","twitter_misc":{"Scris de":"GWMI Admin","Timp estimat pentru citire":"30 de minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#article","isPartOf":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/"},"author":{"name":"GWMI Admin","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/person\/135a1ae8119d1d1755135add5b7287ff"},"headline":"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade","datePublished":"2026-11-02T08:23:36+00:00","dateModified":"2026-11-02T21:39:51+00:00","mainEntityOfPage":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/"},"wordCount":5964,"publisher":{"@id":"https:\/\/www.timberindustrynews.com\/#organization"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"thumbnailUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","articleSection":["Uncategorized"],"inLanguage":"ro-RO"},{"@type":"WebPage","@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/","url":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/","name":"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News","isPartOf":{"@id":"https:\/\/www.timberindustrynews.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"thumbnailUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","datePublished":"2026-11-02T08:23:36+00:00","dateModified":"2026-11-02T21:39:51+00:00","inLanguage":"ro-RO","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/"]}]},{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","width":1536,"height":1024,"caption":"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade"},{"@type":"WebSite","@id":"https:\/\/www.timberindustrynews.com\/#website","url":"https:\/\/www.timberindustrynews.com\/","name":"\u0218tiri din industria lemnului","description":"","publisher":{"@id":"https:\/\/www.timberindustrynews.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.timberindustrynews.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"ro-RO"},{"@type":"Organization","@id":"https:\/\/www.timberindustrynews.com\/#organization","name":"\u0218tiri din industria lemnului","url":"https:\/\/www.timberindustrynews.com\/","logo":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","width":150,"height":57,"caption":"Timber Industry News"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/person\/135a1ae8119d1d1755135add5b7287ff","name":"GWMI Admin","image":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","caption":"GWMI Admin"}}]}},"_links":{"self":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/comments?post=100471"}],"version-history":[{"count":1,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions"}],"predecessor-version":[{"id":100473,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions\/100473"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media\/100472"}],"wp:attachment":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media?parent=100471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/categories?post=100471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/tags?post=100471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}](\"https:\/\/www.globalwoodmarketsinfo.com\/wp-content\/uploads\/2026\/11\/24_japan_european_suppliers.jpg\"){kind=link}
![<\/a><\/p>\nThis means that the outlook for European suppliers cannot be assessed solely through the aggregate housing-start figure. The construction system, strength requirement, dimensions and processing route all affect demand.<\/p>\n<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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![<\/a><\/p>\nLow inventories are not evidence of a buying recovery<\/strong><\/p>\nHayashi cautioned against interpreting lower stocks as a sign of an imminent increase in imports.<\/p>\nHe used Tokyo Lumber Terminal as an example of inventories that had moved to a relatively low level.<\/p>\n<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →","og_url":"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/","og_site_name":"Timber Industry News","article_published_time":"2026-11-02T08:23:36+00:00","article_modified_time":"2026-11-02T21:39:51+00:00","og_image":[{"width":1536,"height":1024,"url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","type":"image\/png"}],"author":"GWMI Admin","twitter_card":"summary_large_image","twitter_misc":{"Scris de":"GWMI Admin","Timp estimat pentru citire":"30 de minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#article","isPartOf":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/"},"author":{"name":"GWMI Admin","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/person\/135a1ae8119d1d1755135add5b7287ff"},"headline":"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade","datePublished":"2026-11-02T08:23:36+00:00","dateModified":"2026-11-02T21:39:51+00:00","mainEntityOfPage":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/"},"wordCount":5964,"publisher":{"@id":"https:\/\/www.timberindustrynews.com\/#organization"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"thumbnailUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","articleSection":["Uncategorized"],"inLanguage":"ro-RO"},{"@type":"WebPage","@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/","url":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/","name":"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News","isPartOf":{"@id":"https:\/\/www.timberindustrynews.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage"},"thumbnailUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","datePublished":"2026-11-02T08:23:36+00:00","dateModified":"2026-11-02T21:39:51+00:00","inLanguage":"ro-RO","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/"]}]},{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/#primaryimage","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2026\/11\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade.png","width":1536,"height":1024,"caption":"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade"},{"@type":"WebSite","@id":"https:\/\/www.timberindustrynews.com\/#website","url":"https:\/\/www.timberindustrynews.com\/","name":"\u0218tiri din industria lemnului","description":"","publisher":{"@id":"https:\/\/www.timberindustrynews.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.timberindustrynews.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"ro-RO"},{"@type":"Organization","@id":"https:\/\/www.timberindustrynews.com\/#organization","name":"\u0218tiri din industria lemnului","url":"https:\/\/www.timberindustrynews.com\/","logo":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/","url":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","contentUrl":"https:\/\/www.timberindustrynews.com\/wp-content\/uploads\/2022\/06\/logo_color.svg","width":150,"height":57,"caption":"Timber Industry News"},"image":{"@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/www.timberindustrynews.com\/#\/schema\/person\/135a1ae8119d1d1755135add5b7287ff","name":"GWMI Admin","image":{"@type":"ImageObject","inLanguage":"ro-RO","@id":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/7e3f366983e368f37c12ad29c07423641931b311f2561bc3cb4b4eaf6f44c3cb?s=96&d=mm&r=g","caption":"GWMI Admin"}}]}},"_links":{"self":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/comments?post=100471"}],"version-history":[{"count":1,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions"}],"predecessor-version":[{"id":100473,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/posts\/100471\/revisions\/100473"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media\/100472"}],"wp:attachment":[{"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/media?parent=100471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/categories?post=100471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.timberindustrynews.com\/ro\/wp-json\/wp\/v2\/tags?post=100471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}](\"https:\/\/www.globalwoodmarketsinfo.com\/wp-content\/uploads\/2026\/11\/26_japan_glulam_imports.jpg\"){kind=link}
![<\/a><\/p>\nHowever, lower stocks were consistent with a market in which supply had already adjusted to weaker demand.<\/p>\nCustomers were not necessarily rushing to replenish. They could choose between European material, domestic species and other imported products, and many remained cautious about purchasing.<\/p>\nThe distinction is commercially important. A reduction in stocks caused by strong consumption can create a need for replacement orders. A reduction achieved by limiting incoming supply may simply leave the market operating at a lower level.<\/p>\nHayashi described the latter situation: soft demand, adjusted supply and limited urgency among buyers.<\/p>\nFor exporters, that reduces the usefulness of inventory figures considered in isolation. Stock levels need to be assessed alongside sales, incoming shipments and the availability of substitute products.<\/p>\nDomestic species are gaining ground<\/strong><\/p>\nJapanese cedar and cypress have become more important competitors to imported softwood.<\/p>\n<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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![<\/a><\/p>\nHayashi linked this development to exchange rates, investment in Japanese sawmilling and changes in supply conditions during earlier periods of disruption.<\/p>\nWhen imported timber becomes more expensive in yen, domestic species become more attractive wherever they can meet the technical requirements.<\/p>\nSubstitution is easier in some applications than others.<\/p>\nPosts and certain framing components do not always require the higher strength or dimensions associated with particular imported products. In these uses, customers have greater flexibility to switch to Japanese material.<\/p>\nEuropean products retain a stronger position where strength, longer lengths, reliable specifications and established supply arrangements are more difficult to replace.<\/p>\nBeams were among the applications Hayashi identified as continuing to support demand for European material.<\/p>\nHis assessment was therefore selective. Domestic timber is taking market share, but Japan still needs imports for products and uses that its domestic supply cannot readily cover.<\/p>\nEuropean suppliers must compete on the requirements of each application<\/strong><\/p>\nThe practical consequence is a more demanding sales environment.<\/p>\nEuropean suppliers continue to provide products that Japanese customers value, but their position depends on the application and the delivered price.<\/p>\nA buyer may retain European material for a structural component requiring particular performance while switching another part of the building to domestic wood.<\/p>\nThe resulting competition takes place within the same construction system, and potentially within the same project.<\/p>\nHayashi also stressed the importance of stable supply and accumulated experience. Japanese customers have established processing methods and commercial relationships around European timber.<\/p>\nThose relationships remain valuable. However, they do not remove the pressure created by a weak yen or give suppliers unlimited room to raise prices.<\/p>\nNon-residential construction offers room for expansion<\/strong><\/p>\nHayashi\u2019s more positive assessment concerned non-residential timber construction.<\/p>\nWood already accounts for a large share of Japanese housing, but its penetration in non-residential buildings is much lower.<\/p>\nHis presentation cited a timber share of only around 12% in the low-rise non-residential category examined.<\/p>\nThis leaves room for greater use of timber in buildings outside the traditional housing market.<\/p>\nDecarbonisation policies and interest in the carbon benefits of timber construction can support that expansion. However, Hayashi did not present environmental arguments as sufficient on their own.<\/p>\nThe industry also needs building methods, products and supply arrangements that make timber practical for developers and contractors.<\/p>\nSumitomo Forestry is working to extend its established Big-Frame construction method into low-rise non-residential buildings of up to four storeys.<\/p>\nThe intention is to apply experience from housing to a part of the market where timber has a much smaller presence.<\/p>\nStandardisation is a major obstacle<\/strong><\/p>\nHayashi identified a recurring problem in non-residential projects.<\/p>\nDesigners, developers and general contractors are often more familiar with steel and concrete. When they consider timber, they may specify unusual dimensions, lengths or components rather than designing around products that factories already manufacture efficiently.<\/p>\nThose requirements can be difficult to supply.<\/p>\nA manufacturer may be unable to produce the requested component, or may need additional time and expense to do so. Costs rise, delivery schedules lengthen and the project becomes harder to execute.<\/p>\nThe customer may then return to steel or concrete.<\/p>\nHayashi\u2019s argument was that timber\u2019s expansion depends partly on avoiding this sequence. More standardised construction methods and a better connection between design and manufacturing would make projects easier to deliver.<\/p>\nThe established housing supply chain offers experience that could be applied more widely, but the non-residential market has not yet achieved the same level of standardisation.<\/p>\nFor European suppliers, this creates a potential opportunity beyond the traditional housing market. Developing it will require cooperation with Japanese customers on specifications, construction methods and reliable supply.<\/p>\n<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. 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![<\/a><\/p>\nHayashi\u2019s overall outlook remained measured. Residential demand is likely to decline gradually, domestic species will continue to compete with imports and exchange rates will remain influential. Nevertheless, European timber retains an important role, while non-residential construction offers a market in which its use can expand.<\/p>\nFranz Kropfreiter, DABG Vienna: <\/em>MENA-demand remains, but the cost of supplying it is rising<\/h4>\n<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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![<\/a>Franz Kropfreiter<\/figcaption><\/figure>\nFranz Kropfreiter\u2019s presentation examined the Middle East and North Africa as a group of important but increasingly uneven markets for imported softwood.<\/p>\nThe region has a young population, substantial construction needs and extensive infrastructure programmes. Many countries also have little domestic timber production and depend heavily on imports.<\/p>\nThose underlying conditions continue to support demand.<\/p>\nHowever, Kropfreiter placed greater emphasis on the obstacles between that demand and a completed timber order: conflict, freight costs, uncertainty over investment, import restrictions and the ability of customers to pay for European material.<\/p>\nHe also described growing competition from South American plantation timber and the risk that redirected European volumes could put pressure on prices in North Africa.<\/p>\nA large regional market with divergent national trends<\/strong><\/p>\nKropfreiter used a definition of MENA covering 18 countries: six in North Africa and 12 in the Middle East.<\/p>\nHe noted that definitions differ, making consistency important when comparing trade statistics.<\/p>\nThe population in his regional overview was approximately 548 million, with a median age of around 27. This creates a very different demographic setting from Japan, with a younger population and continuing pressure for housing, infrastructure and services.<\/p>\nNevertheless, population growth does not translate automatically into imports at any available price.<\/p>\nKropfreiter estimated regional softwood imports at approximately 8.3 million m\u00b3 for 2026. He made clear that this was a full-year estimate based on trade data available for part of the year.<\/p>\nWithin that total, the outlook for the Middle East was substantially weaker than for North Africa.<\/p>\nDisruption to Middle Eastern trade was encouraging suppliers to redirect volumes towards African destinations. As a result, the commercial position of one market was increasingly affected by events in another.<\/p>\nFreight and conflict alter the economics of trade<\/strong><\/p>\nKropfreiter linked the deterioration in parts of the Middle Eastern market to conflict-related disruption and sharply higher transport costs.<\/p>\nHis presentation described the effects on shipping routes, infrastructure, investment decisions and the willingness of customers to commit to new orders.<\/p>\nFor timber suppliers, the consequence is a higher and less predictable cost of reaching the buyer.<\/p>\nA market can remain interested in importing wood while becoming commercially unattractive to serve. If freight absorbs too much of the available margin, suppliers may reduce their exposure or seek alternative destinations.<\/p>\nCustomers face the other side of the same calculation. Higher transport costs increase the delivered price even when the underlying timber price changes little.<\/p>\nKropfreiter did not expect a substantial easing in freight costs while the disruption continued. He considered persistent high transport costs a reason why further volumes could move away from Middle Eastern markets.<\/p>\nRedirected supply creates pressure elsewhere<\/strong><\/p>\nNorth Africa can absorb some of the timber that becomes harder to sell in the Middle East, but this adjustment carries risks.<\/p>\nAdditional supply does not necessarily arrive at the same pace as growth in local demand.<\/p>\nKropfreiter warned that a market showing strong purchasing activity can attract several suppliers at once. The resulting increase in availability may quickly weaken prices.<\/p>\nThis is particularly relevant where exporters are actively searching for replacement outlets.<\/p>\nA destination may appear attractive because business elsewhere has deteriorated. Yet if many producers make the same decision, the opportunity can diminish rapidly.<\/p>\nFor European sawmills, this creates a difficult balance between maintaining shipments and avoiding further deterioration in the returns available from alternative markets.<\/p>\nEgypt remains essential for Nordic lower grades<\/strong><\/p>\nEgypt occupied a central place in Kropfreiter\u2019s assessment.<\/p>\nThe country relies heavily on imported wood and wood-based products. It also has a substantial domestic processing industry, including a large number of furniture workshops and factories.<\/p>\nConstruction, infrastructure and tourism investment support additional demand.<\/p>\nFor Finland and Sweden, Egypt is particularly important as an outlet for lower grades of softwood.<\/p>\nKropfreiter described a familiar commercial tension: suppliers regularly express dissatisfaction with the prices available in Egypt, yet continue to send large volumes because alternative outlets for the same material are limited.<\/p>\nThe relationship is therefore shaped by the full production mix of a sawmill.<\/p>\nA producer must sell the lower grades generated alongside its higher-value output. Stronger returns on selected products do not eliminate the need to find a home for the rest.<\/p>\nEgypt provides that outlet on a scale that is difficult to replace.<\/p>\nKropfreiter described Finland and Sweden as overwhelmingly dominant within the supply figures he presented. He also noted the limitations of the available information on Russian deliveries, which complicate a complete assessment of the market.<\/p>\nEgyptian purchasing had strengthened during the year<\/strong><\/p>\nThe monthly import pattern discussed by Kropfreiter showed a relatively weak start followed by stronger deliveries.<\/p>\nOn that basis, he considered it possible for full-year shipments to Egypt to exceed the previous year\u2019s level.<\/p>\nHowever, stronger volume does not necessarily mean that the market is becoming more profitable for suppliers.<\/p>\nEgypt\u2019s importance partly arises from its willingness to absorb grades that have fewer alternative destinations. That gives it a continuing role in Nordic export programmes, but also exposes suppliers to persistent price pressure.<\/p>\nKropfreiter\u2019s broader question was whether buyers in Egypt and other regional markets would be able to afford European material if raw-material and processing costs continued to rise.<\/p>\nWhere the answer is uncertain, demand alone offers limited reassurance.<\/p>\nSaudi Arabia: projects continue, but purchasing has become more cautious<\/strong><\/p>\nSaudi Arabia remains an important destination for timber used in construction and related activities.<\/p>\n<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. 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![<\/a><\/p>\nKropfreiter distinguished between the most ambitious development visions and the wider range of projects requiring practical infrastructure.<\/p>\nHe referred to preparations associated with Expo 2030 and the 2034 FIFA World Cup, alongside other construction programmes.<\/p>\nHowever, he said recent disruption had increased uncertainty and made buyers more hesitant about placing new orders.<\/p>\nThe approximately 1.3 million m\u00b3 market estimate discussed in his presentation was consequently subject to downside risk.<\/p>\nKropfreiter also questioned how quickly the largest development concepts would be implemented. His assessment placed greater weight on projects with clear infrastructure requirements than on the full scale of earlier announcements.<\/p>\nFor timber suppliers, the issue is the timing and execution of actual work. A large project pipeline does not provide the same commercial certainty as orders being placed and material being consumed.<\/p>\nEnd uses determine both specifications and substitution risks<\/strong><\/p>\nMuch of the softwood used in Saudi Arabia serves concrete construction, including formwork, rather than timber-framed housing.<\/p>\nThis affects the characteristics of the market.<\/p>\nCustomers may request clean, square-edged material even where the end use does not require the full structural performance of the product supplied.<\/p>\nEuropean producers therefore face a market that can be demanding about appearance and specification while remaining highly sensitive to price.<\/p>\nPallet production provides another significant outlet, but this is also an area where South American suppliers have become more competitive.<\/p>\nKropfreiter referred to increasing availability from countries such as Brazil and Argentina, adding to the pressure on established suppliers.<\/p>\nLogistics were also changing the way material reached customers. He described Jeddah as an increasingly important entry point in the disrupted trading environment, including for onward distribution to other regional markets.<\/p>\nThese arrangements can keep trade moving, but may add inland transport and handling costs.<\/p>\nMorocco: favourable project demand, with growing competition<\/strong><\/p>\nKropfreiter remained broadly positive about Morocco\u2019s medium-term prospects.<\/p>\nPreparations for the 2030 FIFA World Cup and associated infrastructure development support demand, while the country\u2019s economic links with Europe provide an additional basis for business.<\/p>\n<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. 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![<\/a><\/p>\nHowever, he expected some easing from the strong conditions of the previous two years.<\/p>\nHis presentation discussed a market of roughly 800,000 m\u00b3, with Finnish and Swedish material retaining a prominent position and redwood playing an important role.<\/p>\nCompetition is increasing.<\/p>\nPlantation-grown timber is becoming more visible in packaging and pallet applications, where price can be particularly important. Material from Spain and Portugal also contributes to supply, although Kropfreiter noted limitations in the available documentation of those flows.<\/p>\nHe reported weaker shipments from Germany and Austria in the period discussed.<\/p>\nMorocco illustrated his wider concern about the effect of supplier concentration. A growing market can attract more material than it can immediately absorb, especially when exporters are redirecting volumes from less accessible destinations.<\/p>\nThe commercial opportunity therefore depends on matching supply to the pace of consumption.<\/p>\n<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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![<\/a><\/p>\nAlgeria: import licences restrict access to underlying demand<\/strong><\/p>\nIn Algeria, Kropfreiter identified import licensing as a principal obstacle.<\/p>\nThe country remains an important customer for Nordic softwood, but demand cannot translate into orders unless buyers have the necessary authorisations.<\/p>\n<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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![<\/a><\/p>\nThis creates a constraint that is different from weak consumption.<\/p>\nA buyer may need material and be willing to purchase it, yet still be unable to complete an import transaction.<\/p>\nFor exporters, the uncertainty complicates shipment planning and reduces the reliability of the market as an outlet.<\/p>\n<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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![<\/a><\/p>\nKropfreiter did not identify a clear resolution to the licensing problem. It remained a significant limitation on the business that suppliers could expect to conclude.<\/p>\nHigher European costs may accelerate substitution<\/strong><\/p>\nKropfreiter returned repeatedly to the question of affordability.<\/p>\nEuropean sawmills face pressure from sawlog costs and the prospect of tighter raw-material availability. Passing those costs through to MENA customers may prove difficult.<\/p>\nBuyers can accept higher prices when their own demand is strong and projects require material urgently. In weaker conditions, they may postpone orders, reduce consumption or change products.<\/p>\nFormwork provides one example.<\/p>\nWhere plywood offers a cheaper or more convenient solution than individual pieces of sawn timber, customers can alter their purchasing accordingly.<\/p>\nThe competition is therefore not limited to timber from another country. It can involve a different wood product serving the same construction function.<\/p>\nSpecies substitution may also occur, although preferences vary across the region. Kropfreiter described a strong preference for spruce in many Middle Eastern applications, with greater willingness to accept pine when availability or price makes substitution necessary.<\/p>\nThese adjustments place limits on how far European suppliers can raise prices without affecting demand.<\/p>\nMENA competes with other destinations for the same wood<\/strong><\/p>\nThe region\u2019s ability to attract supply also depends on the returns available elsewhere.<\/p>\nKropfreiter pointed out that the same log dimensions and resulting products may serve several export markets.<\/p>\nIf another destination offers a stronger net return, producers have an incentive to redirect suitable material.<\/p>\nMENA therefore competes internationally for wood even where its own underlying consumption requirements remain unchanged.<\/p>\nThat competition may become more difficult if European log costs rise or supply tightens.<\/p>\nAt the same time, South American plantation timber is expanding the range of alternatives available to customers. Kropfreiter expected those suppliers to continue gaining a presence in applications where their products and prices are competitive.<\/p>\n<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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![<\/a><\/p>\nHis assessment left European exporters facing two pressures at once: some customers may struggle to pay the prices required by European production costs, while competing suppliers may offer material at a lower delivered price.<\/p>\nEgypt remains particularly difficult to replace as an outlet for Nordic lower grades. Elsewhere, suppliers must weigh construction demand against freight costs, purchasing uncertainty, licensing restrictions and the risk of oversupply.<\/p>\nQuestions from the floor<\/strong><\/p>\nThe questions following the session were brief and centred on a clarification of Koskinen\u2019s opening remarks.<\/p>\nA participant identifying himself as a representative of a Dutch association questioned the reference to delegates who might still be trading Russian timber.<\/p>\nKoskinen explained that his comment referred to the international composition of the audience, including participants from markets such as North Africa, the Middle East and Japan.<\/p>\nThe questioner acknowledged the clarification.<\/p>\n<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. Across the Middle East and North Africa, demand for imported timber … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":100472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nGWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.timberindustrynews.com\/ro\/gwmi-at-isc-2026-part-3-russias-export-retreat-japans-changing-demand-and-the-pressures-on-mena-trade\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GWMI at ISC 2026 \u2014 Part 3: Russia\u2019s export retreat, Japan\u2019s changing demand and the pressures on MENA trade - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. 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![<\/a><\/p>\nThe exchange concerned which delegates and destinations Koskinen had been referring to; it did not develop into a wider discussion of trade restrictions or compliance.<\/p>\nNo further substantive questions followed in the supplied transcript, and the session closed before the coffee break.<\/p>\nExport opportunities depend on products, prices and the cost of reaching customers<\/strong><\/p>\nThe three presentations left a varied picture of the markets beyond Europe and North America.<\/p>\nRussia\u2019s export contraction has reduced its presence in international softwood trade, but the domestic industry has not found an adequate replacement for the business it has lost. Its difficulties now extend from sales and profitability to maintenance and the condition of production assets.<\/p>\nJapan continues to buy substantial volumes from Europe, although exporters must operate within a shrinking residential market and compete more closely with domestic species. The clearest opportunity for expansion lies in non-residential construction, where standardised methods and dependable supply could help timber gain a larger share.<\/p>\nMENA retains substantial requirements for imported wood. Yet the value of those opportunities depends on the buyer\u2019s ability to pay, the cost of transport and the availability of competing products. Demographic growth and large construction programmes cannot, by themselves, guarantee acceptable returns for suppliers.<\/p>\nFor European sawmills, selling the full range of production remains central. Higher-specification material needs customers that value its performance, while lower grades require dependable outlets capable of absorbing significant volumes.<\/p>\nThe session showed how difficult it has become to satisfy both requirements across a changing export market.<\/p>\nGWMI\u2019s fourth and final report from ISC 2026 will cover raw-material availability in Central Europe, the construction market, the global demand outlook and the role of timber construction in reducing emissions.<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"Russia\u2019s sawmills face a smaller export market and deteriorating profitability. Japan still needs European softwood, but a weaker yen and greater use of domestic species are changing purchasing decisions. 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