On the Russian timber market, predominantly negative sentiment remains among market participants, which is reflected in weak business activity and a downward price trend.\u00a0The timber market remains under serious pressure due to the continuing extremely high uncertainty about the future of sales of finished timber products from mills and factories.<\/p>\n
Moreover, compared to the previous month, a negative situation began to be noted among large manufacturers of wood-based MDF, chipboard, OSB.\u00a0Representatives of mills interviewed by GWMI report that products are sold much worse than 1-1.5 months ago.\u00a0This is primarily due to the declining purchasing power of the population and the fall in real incomes of the population.\u00a0Buyers go into savings mode.\u00a0Even OSB at the beginning of the construction season is sold much worse than expected, manufacturers note.<\/p>\n
Over the past two months, increasingly pessimistic attitudes have become prevalent in the harvesting industry, as new information became available and increased uncertainty in the short term. In April, the European Union announced a ban on timber products from Russia (all those in HS Code 44 group). Sawn timber, wood pellets, all types of wood-based panels, roundwood etc. may no longer be imported into the EU from July 10, 2022.<\/p>\n
The situation in the birch plywood segment is the most challenging, since 2-3 of ots output volume in the Russian Federation is exported. The top three sources of\u00a0 Russian birch plywood imports are Europe, the USA and Egypt. Direct export to the first two destinations will now be closed. It means that plywood plants have to redirect 2 million m3 of product (based in 2021 volumes) to other markets or reduce output volumes. This problem cannot be solved quickly under the current conditions of restricted and expensive logistics.<\/p>\n
Despite the extremely difficult tasks faced by the business, the industry's attitude is constructive and innovative. Industry actors submit proposals to decision-making authorities regarding development of the domestic demand for plywood and other products, issuance of a government contract and a reserve for timber industry products, as well as measures incentivizing consumption in the Russian market. However, this is not a fast process. And in the meantime, plywood plants were actively introducing quotas and stop third-party procurement in April, lowering their purchasing prices considerably.<\/p>\n
Almost all Russian plywood plants reduced prices, with some exceptions. Many raw material suppliers report growing account receivable amounts, since plywood plants are not paying for the supplied veneer logs.<\/p>","protected":false},"excerpt":{"rendered":"
On the Russian timber market, predominantly negative sentiment remains among market participants, which is reflected in weak business activity and a downward price trend.\u00a0The timber market remains under serious pressure due to the continuing extremely high uncertainty about the future … Continue reading