EU+UK plywood imports from Russia and elsewhere dipped a little in early 2020 with the onset of the pandemic but reached new heights in 2021 and the first half of 2022 with the sharp rebound in construction and DIY activity after the first lockdown period.<\/p>\n
Then, in February 2022, Russia invaded Ukraine and the EU and UK responded by imposing economic sanctions on Russia and Belorussia, including a total ban on all imports of timber products from both countries. Some large European companies also responded with their own self-imposed boycotts of products from these countries. Direct EU+UK imports of Russian and Belorussian plywood had fallen to negligible levels by August 2022.<\/p>\n
This occurred just at a time when the wider European economy was beginning to cool against the background of sharply rising interest rates to control high levels of inflation, itself partly driven by a massive hike in energy prices as availability of Russian gas and oil was curtailed. Public funds to support post-COVID recovery were also being progressively removed, while confidence was severely hit by the political instability in Eastern Europe and the downturn in the wider global economy.<\/p>\n
As a result, the anticipated surge in plywood imports into Europe from alternative supply countries following the removal of Russian and Belorussian products from the market was less dramatic than expected. By far the biggest gain in market share was made by temperate hardwood plywood from China.<\/p>\n
There was also a surge in birch plywood imports into the EU from Kazakhstan, raising immediate concerns that some European importers were deliberately circumventing the sanctions by sourcing Russian birch plywood from third countries.<\/p>\n
The signs are that EU domestic plywood manufacturers were also unable to significantly increase production in response to the supply gap that opened following the sanctions on Russian and Belorussian products. Data from the European Panels Federation indicates that total EU plywood production fell 2.5% from 3.2 million cu.m in 2021 to 3.1 million cu.m in 2022.<\/p>\n
Similarly, Eurostat data shows that production of plywood in Finland, by far the largest birch plywood manufacturing country in the EU, fell from 1.13 million cu.m in 2021 to 1.11 million cu.m in 2022.<\/p>\n
This year, EU+UK imports of tropical plywood have held up better than imports of both temperate hardwood and softwood plywood. In the first nine months of 2023, EU+UK plywood imports of tropical plywood were down only 6% at 353,000 cu.m. However, direct imports from the tropics fell 15% to 244,000 cu.m.<\/p>\n
The relative stability in overall imports was mainly due to a 45% increase, to 94,000 cu.m, in imports of plywood faced with tropical hardwood from China. Most Chinese product was destined for the UK and the rise this year in fact represents a rebound to more normal levels after a sharp downturn in 2022 due to supply problems during COVID lockdowns in China.<\/p>\n
Considering EU+UK plywood direct imports from tropical countries between January and September this year, Indonesia was down 7% at 108,400 cu.m, Gabon was down 15% at 51,500 cu.m, Malaysia was down 22% at 35,100 cu.m, Morocco was down 30% at 11,600 cu.m, and Vietnam was down 50% at 10,300 cu.m.<\/p>\n
However, imports of tropical hardwood plywood from Brazil increased 13% to 16,000 cu.m, while imports from Paraguay increased 24% to 5,900 cu.m.<\/p>\n
In the first nine months of this year, EU+UK plywood imports of temperate hardwood plywood were down 38% at 1.31 million cu.m. The decline was mainly due to imports from Russia and Belarus, which were 591,000 cu.m and 113,000 cu.m respectively in the first nine months last year, falling to zero this year.<\/p>\n
Imports of temperate hardwood plywood from China were also down 20% at 969,000 cu.m during the January to September period, while imports from Ukraine fell 6% to 116,000 cu.m.<\/p>\n
A rise in imports from Kazakhstan - from negligible levels to 112,000 cu.m in the first nine months of this year - and a doubling of imports from Turkey, to 47,000 cu.m, did little to offset the overall downturn.<\/p>\n
In the first nine months of 2023, EU+UK softwood plywood imports were down 24% to 1.01 million cu.m. In the case of softwood plywood, the decline in imports was across the board for all major supply countries.<\/p>\n
Again, imports from Russia and Belarus were at zero this year, but these countries were only ever relatively minor suppliers of softwood plywood into the EU+UK, contributing 65,000 cu.m and 55,000 cu.m respectively in the first nine months of last year.<\/p>\n
Bigger declines in absolute import volumes were recorded for softwood plywood from Brazil (down 8% to 769,000 cu.m), Chile (down 29% to 117,000 cu.m), and China (down 58% to 55,000 cu.m).<\/p>\n
A clear indicator of the overall weakness of the EU+UK plywood market this year is that it took much longer than usual for the duty-free softwood import quota \u2013 set this year at 482,648 cu.m in the EU and 201,500 cu.m in the UK - to be filled. The EU quota was only filled in July, whereas the UK quota was only filled in September.<\/p>\n
Meanwhile, the EU and UK sanctions on imports of Russian plywood have significant knock-on effects for the global plywood market.<\/p>\n
In a presentation to the FORESTA 2023 conference held in San Marino in November, Mr. Nikolay Ivanov of the Union of Timber Manufacturers and Exporters of Russia, reported that overall birch plywood production in Russia was projected to fall only 5% from 3.3 million cu.m in 2022 to 3.15 million cu.m in 2023, while exports would fall more dramatically, by 19%, from 1.98 million cu.m to 1.60 million cu.m.<\/p>\n
This implies that apparent consumption of birch plywood in Russia is expected to rise 11% from 1.41 million cu.m last year to 1.56 million cu.m in 2023.<\/p>\n
The balance of export destinations for Russian plywood is also expected to change dramatically. In 2022, the leading destinations, in order of share (by volume) were Europe (35%), Middle East and North Africa (34%), North America (11%), other CIS (10%), China (6%), South Korea (2%), and all others accounting for 3%. In 2023, the forecast share of export destinations is Middle East and North Africa (47%), China (16%), other CIS (15%), North America (15%), South Korea (4%), and all others accounting for 3%.<\/p>\n
In other words, with Europe no longer buying Russian plywood, larger volumes are now being distributed in other parts of the world, particularly in the Middle East and North Africa, China, and CIS countries, notably in South Asia.<\/p>\n
A small proportion of these products may be finding their way, indirectly, into the European market, but most will be competing with other plywood and panel suppliers in other global markets.<\/p>","protected":false},"excerpt":{"rendered":"
EU+UK plywood imports from Russia and elsewhere dipped a little in early 2020 with the onset of the pandemic but reached new heights in 2021 and the first half of 2022 with the sharp rebound in construction and DIY activity … Continue reading