Overview of Russian timber industry markets for 6 months of 2021

The Russian Forest Association presents an overview of the Russian timber industry markets for the first half of 2021. The overview of the Russian timber industry markets includes logging, production of sawn timber, wood-based panels, cellulose and fuel wood pellets (pellets).

The most significant growth in production was demonstrated by the segment of wood-based panels (plywood, MDF / HDF, OSB and chipboard): 25-35% in 6 months of 2021 compared to the same period in 2020 (YoY). The second most intensive indicator is that of the wood pellets market: growth was 19%. Sawn timber production grew by 2.6% in 6 months of 2021, and the round timber market showed little change (logging growth was 0.1%). Pulp production remained unchanged at last year's level.

Lack of materials

In 2020-2021, there is a significant imbalance between supply and demand in almost all global markets for timber products. Lockdowns, introduced in many countries and regions of the world, in 2020 led to a drop in demand for timber products, a break in supply chains and established sales channels. At the same time, shippers of forest products faced a significant increase in costs for the services of logistics and transport companies: transportation rates increased due to restrictions amid the spread of COVID-19 and the resulting subsequent shortage of containers and sea vessels.

As government restrictions were lifted in the third and fourth quarters of 2020, product demand began to recover at a high rate. The extraordinary demand for building materials from the segment of low-rise individual housing construction has led to the fact that there are no longer enough materials on the market. As a result, prices for almost all timber industry products have grown unprecedentedly.

The largest jump in prices is for sawnwood: 62% compared to the beginning of the year. Prices for wood-based panels and round sawn timber increased by 30-70% and 35-50%, respectively.

In the second half of 2021, a restoration of the supply and demand balance, the normalization of stocks and a change in the price trend are forecasted in the timber industry product markets.

Key indicators

1. Logging in Russia for 6 months of 2021 shows near-zero growth rates: + 0.1%. Purchase prices of timber processing plants for round timber increased by 35-50% over the year.
2. The production of wood-based panels (plywood, MDF / HDF, OSB and chipboard) is showing double-digit growth rates: + 25-35%. Prices for most types of wood-based panels on the domestic market soared by 30-70%.
3. Lumber production for 6 months of 2021 increased by 2.6%. Mill prices for sawn timber rose 62% YoY.
4. Pulp production for 6 months of 2021 did not change, remaining at the level of 2020. Producer prices rose 21% YoY.
5. The production of fuel wood pellets (pellets) increased by 19% in 6 months. Producer prices rose 17% YoY.

«Markets for forest products continue to be an important and integral part of the global economy, and play a critical role in shaping the Green Agenda model and achieving sustainable development principles. This is one of the reasons for such a staggering growth in demand for environmentally friendly building materials made of wood, as well as for all timber industry products in general», — commented in the Association.