Russian lumber companies, forced to halt exports to the EU due to sanctions, doubled supplies to China and Kazakhstan in March. Shipments to Belarus and Turkey also increased significantly. Due to the departure of world container lines from the Russian Federation, companies are restructuring logistics in favor of the railway. However, companies have not yet succeeded in redirecting all export volumes to the EU.
Russian lumber companies, according to Roslesinforg, in March, against the background of the war in Ukraine, sharply increased the supply of lumber cargo by rail to Belarus (1.8 times), Turkey (1.6 times), Azerbaijan (by 37%) and Egypt (by 23%). But most of all, twice, increased transportation on the routes Russia-China and Russia-Kazakhstan.
As Roslesinforge explained to Russian financial daily Kommersant, an increased demand for the transportation of lumber is observed in almost all directions that are not related to crossing EU borders.
At the same time, if earlier more than half of deliveries to Turkey (mainly lumber and plywood) went through the ports of St. Tbilisi-Kars to Turkey.
The EU introduced sanctions against Russian goods in early April. They affected all the main export products – wood and wood products, forest raw materials, uncoated kraft paper and kraft board, as well as furniture and its parts. The import of equipment and technologies is also prohibited in Russia. But, a Kommersant source in one of the companies in the industry notes, deliveries to Europe actually stopped back in March, after the world’s largest container lines left the Russian Federation.
At the same time, the interlocutor of Kommersant says, companies continue to supply lumber products to the Mediterranean countries by sea in bulk (that is, in the hold), although container transportation prevailed before. Cargo in containers goes to China by rail, but also not without problems: often due to restrictions in China against the backdrop of covid and a large number of cargo that were redirected to Asia, they stand at the border for a long time, the source says. Moreover, he notes, the closing and opening of borders is unpredictable. Shortages in the traditional Russian wood export markets have already caused prices to soar.
“We predicted that it would take at least four months to form a new transportation system,” says Pavel Chashchin, director of Roslesinforg. “Now we see that the timber merchants have coped with the task faster.”
Ilim notes that the company is faced with the need to redirect almost 20% of its exports from Europe to new markets. At the same time, logistical restrictions significantly affect the cost of freight, they note there. The company recalled that China remains its key market, where supplies are made by land through four border crossings, and Ilim is also increasing supplies by sea. Sveza reported that the manufacturer directs its products to markets not affected by restrictions: the CIS countries, Asia, Africa and Latin America. The main consumer of the products was and remains the domestic market, the company noted.
Other companies in the industry did not comment on the situation, but Kommersant’s sources note that the situation remains difficult, and so far it has not been possible to reorient all export volumes due to insufficient capacity of new markets or logistical problems. However, the growth in world prices for forestry products partially compensates for the decline in exports.
The most difficult position to replace is the sales markets for birch plywood, wood chips, wood pellets, larch lumber and birch pulpwood, which traditionally went mainly to Europe, WhatWood agency notes. Thus, the share of Russian birch plywood in the EU market is 40%, birch pulpwood – 11%, pellets – 10%, chips – 5%, softwood lumber – 5%, experts say.
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