{"id":83158,"date":"2022-11-04T08:48:56","date_gmt":"2022-11-04T08:48:56","guid":{"rendered":"https:\/\/tin.happy-projects.ro\/disruptions-global-trade-lumber-logs-due-ukraine-war\/"},"modified":"2025-09-19T08:58:46","modified_gmt":"2025-09-19T08:58:46","slug":"disruptions-global-trade-lumber-logs-due-ukraine-war","status":"publish","type":"post","link":"https:\/\/www.timberindustrynews.com\/ro\/disruptions-global-trade-lumber-logs-due-ukraine-war\/","title":{"rendered":"Disruptions in global trade of lumber and logs due Ukraine war"},"content":{"rendered":"
\n

Russia\u2019s invasion of Ukraine on February 24th came as a shock to many in Europe and around the world. Beyond the human cost of the war, it\u2019s having profound impacts on global markets \u2013 including markets for forest products. We see the conflict impacting markets for forest products in three main ways:<\/p>\n

1.\u00a0Trade restrictions.<\/strong>\u00a0Western countries have introduced trade sanctions against Russia and Belarus for both the import and export of many products. Russia and Belarus are in turn retaliating with their own sanctions. Meanwhile, Ukraine\u2019s production and export of forest products will fall dramatically while war rages in the country. Forest products from all three countries are now classified as \u201cconflict timber\u201d and thereby no longer certified by leading forest certification organizations. Together, these restrictions are reshaping global trade flows. Some of the changes will be long-lasting.<\/p>\n

2.\u00a0Macro-economic consequences.<\/strong>\u00a0Energy prices have risen sharply around the world. In Europe, where Russia provides 40% of natural gas supply, gas prices have more than doubled, driving up energy costs for many industries. Russia supplies 11% of the world\u2019s oil and in 2022 we have seen the sharpest rise in global oil prices in 50 years.<\/p>\n

Higher energy costs and trade restrictions will impact the broader economy. Expectations for GDP growth in Europe and globally have been revised downwards. This will result in lower demand growth for forest products.<\/p>\n

3.\u00a0Russian industry growth:<\/strong>\u00a0Russia is home to vast forest resources, including 33% of global softwood growing stock and 14% of the world\u2019s softwood harvest. With a large unutilized wood supply and among the lowest wood costs in the world, Russia has long held the promise of a larger future role in global supply of forest products.<\/p>\n

Russia\u2019s government has set ambitious goals for industry growth by 2030. But those goals are now unlikely to be met as Russia\u2019s industry struggles to source foreign equipment, spare parts, and expertise. Not only will capacity expansion be difficult, but also maintenance of facilities and the quality of the forest products manufactured.<\/p>\n

These three dynamics will shape forest product markets in 2022 and beyond. The effects will be felt in both sanctioning and non-sanctioning countries, in the short and mid- to long-term (Figure 1) Trading partners and products Russia, Belarus, and Ukraine exported forest products worth 17.3 USD billion in 2021, representing about 5% of all exports globally. More than 70% of the export was from Russia, 16% from Belarus and 12% from Ukraine. Asia is the most important market for Russia, representing 47% of exports in 2021. But Europe is also an important market, receiving 26% of export from Russia and 83% of exports from Belarus and Ukraine (Figure 2).<\/p>\n

\"\"\"\"<\/p>\n

In terms of demand for forest products, the three countries are less important on global markets. With large domestic forest products industries, import of most forest products is relatively modest, at 4.5 USD billion in 2021.<\/p>\n

Softwood lumber is by far the most important forest product exported by Russia, with a value of 5.8 USD billion in 2021, representing 46% of total forest product exports (Figure 3).<\/p>\n

\"\"<\/p>\n

Other important exports include paper and paperboard (16% of exports), panels (15%), and market pulp (11%). Logs are only 8% of exports but represent an important source of raw materials for China\u2019s sawmill industry and Finland\u2019s pulp and paper industry. Russia also exported more than 2 million tonnes of wood pellets in 2021, mainly to Europe.<\/p>\n

Impact on lumber markets<\/strong><\/p>\n

One immediate impact of the war in Ukraine will be a tighter market for softwood lumber in Europe. About 20% of European lumber import and 9% of European supply is lumber from Russia, Belarus, and Ukraine (\u201cBRU\u201d) \u2013 in total, almost 9 million m3 in 2021 (Figure 4). The largest importers include the UK, Italy, and Netherlands, but the supply-demand balance throughout Europe will be upset with the loss of this volume. Europe is a net exporter of lumber, of almost 20 million m3, mostly to the US and China. To maintain the current market balance in Europe, lumber exports might therefore need to decline by almost half. But many producers\u2019 export business, to the US especially, is now well-established and committed. Increased competition between European and export customers is inevitable.<\/p>\n

\"\"<\/p>\n

Meanwhile Europe will struggle to expand production within the region, at least short-term, as harvests in Central Europe decline in the wake of the spruce bark beetle. Other parts of Europe, mainly the Nordics, have room to increase sawlog and lumber supply. But such expansion will take time, coming online in 2023-24 at the earliest.<\/p>\n

China is the other large recipient of lumber from \u201cBRU\u201d (Figure 4). China has not announced any trade sanctions and is unlikely to do so. But there are at least two reasons why this export anyway will be impacted; the loss of timber certification, and the challenges that BRU sawmill industries now face to maintain and expand their facilities. Demand for certified forest products among Chinese consumers is low despite a growing urban and high-income segment.<\/p>\n

More importantly, buyers of lumber in China for its use in products for export, including furniture and packaging, can require certified wood. These buyers will now be forced to look for alternatives. Demand for European lumber could rise as a result.<\/p>\n

The war in Ukraine will disrupt global trade flows in softwood lumber (Figure 5). Reduced BRU export to Europe risks causing lower European exports to the US and Asia. The US, with continued strong demand growth and few supply alternatives short-term, will compete to retain imports from Europe. Russia\u2019s loss of timber certification and difficulties in expanding production at pace with China import demand, will likely lead to increased Chinese demand for European lumber. The current global balance of export and import appears increasingly difficult to resolve; all key export regions face supply constraints and strong demand is expected in most import regions. Supply growth is required somewhere, most likely in the US South. In the short term it seems global softwood lumber markets will be tight.<\/p>\n

\"\"<\/p>\n

Impact on log and chip markets<\/strong><\/p>\n

The war in Ukraine will impact European pulplog and chip markets, while sawlog markets will be less affected. Log exports from Belarus and Ukraine are only small. Russia is a large exporter of logs and chips, but the export of sawlog qualities is mainly to China. Europe receives mainly lowergrade hardwood pulplogs and softwood chips. Finland is by far the largest recipient of Russian pulplog and chip, with smaller volumes also exported to Sweden and the Baltics.<\/p>\n

Russia\u2019s export of logs and chips to has declined over the last 15 years due to a series of trade restrictions, including export tariffs (2007-08) and an export ban introduced in January 2022 on softwood logs and high-end hardwood logs. The new development due to the war in Ukraine is the EU\u2019s restrictions on all imports \u2013 now even including woodchips and hardwood pulplogs (Figure 6).<\/p>\n

This presents a significant challenge for Finland\u2019s pulp and paper industry. Imports from Russia represent 36% of hardwood pulpwood supply and 84% of imports, while the import of chips represents 31% of supply and 79% of imports. Finland will struggle to replace the hardwood chip supply, and tight markets throughout the Baltic Sea region seems inevitable. Woodchip supply is linked to sawmill activity, which could grow with strong lumber markets and room to increase softwood harvests.<\/p>\n

These developments can impact Europe\u2019s sawmill industry in different ways. In general, we should expect stronger pricing both for sawlogs and sawmill by-products (as well as lumber). There will be upward pressure on wood chip prices in Northern Europe, for hardwood at least but probably also softwood due to demand substitution.<\/p>\n

Competition from Chinese buyers for European sawlogs will likely intensify with reduced harvest in Central Europe and as some Chinese sawmills will seek new sources of certified timber. The loss of Russian wood pellet imports is unlikely to impact demand for European-made pellets and sawdust from European sawmills because the pellet imports are mainly for the industrial market, not the residential market served by local mills.<\/p>\n

Global implications<\/strong><\/p>\n

In summary, we expect many short- and long-term disruptions to global trade of forest products following the war in Ukraine. Several of these will directly impact European lumber producers:<\/p>\n

\u2022 Lumber markets will tighten in Europe, as import from Russia and Belarus is banned and import from Ukraine declines, together representing about 9% of European lumber consumption. Europe will likely reduce export to the US and China.<\/p>\n

\u2022 China will seek new suppliers of certified lumber and logs to replace \u201cconflict timber\u201d in applications where certification is important (mainly production for export).<\/p>\n

\u2022 Investment in sawmills in Russia and Belarus will slow with reduced access to foreign capital, equipment, and specialist expertise. Product quality will also suffer.<\/p>\n

\u2022 Russian exports will shift focus even more heavily towards China, with repercussions for other trade flows. A new global geopolitical landscape could mean this pattern endures.<\/p>\n

\u2022 Interest will grow in investing in other softwood fiber regions to build new softwood lumber, pulp and paper capacity. The US South is one region where increased investment is very likely, due to competitive log prices and additional supply potential. Within Europe, tighter lumber markets could drive expansion of the sawmill capacity in the Nordic region.<\/p>\n<\/div>\n

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Russia\u2019s invasion of Ukraine on February 24th came as a shock to many in Europe and around the world. Beyond the human cost of the war, it\u2019s having profound impacts on global markets \u2013 including markets for forest products. We … Continue reading →<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":50441,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[4716,4715,4714],"tags":[3284,3306,3562,4604],"class_list":["post-83158","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-trends","category-market-analysis","category-wood-industry-prices","tag-logs","tag-lumber","tag-trade","tag-ukraine-war","topic-forestry","topic-industry-prices","topic-sawmilling","area-australia-and-pacific-region","area-china","area-europe","area-north-america","area-russia"],"acf":[],"yoast_head":"\nDisruptions in global trade of lumber and logs due Ukraine war - 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\/disruptions-global-trade-lumber-logs-due-ukraine-war\/\" \/>\n<meta property=\"og:locale\" content=\"ro_RO\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Disruptions in global trade of lumber and logs due Ukraine war - Timber Industry News\" \/>\n<meta property=\"og:description\" content=\"Russia\u2019s invasion of Ukraine on February 24th came as a shock to many in Europe and around the world. 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