Russia’s exports of plywood to the U.S. decreased 21% in January - October 2022.
@Andrey_Tikhomirov @David_Bagdy have you been following this analysis? Price decline by 74% of Russian plywood and 29% decline in export volume to US? These appear to be quite large and significant numbers …
This will be the trend as Russia continues to isolate itself from the rest of the world. It could be decades before Russia becomes anything but a third-world producer of wood products.
Do you think the outcome of the war will have any significant effect? or is most of the damage already done?
I can say a lot of damage has been done. Where do we go from here? This depends on what the outcome of the war is. Surprisingly we hear nothing about a peaceful resolution. Interesting.
Sadly @David_Bagdy in the news, all we hear about is escalation in the Spring, from both sides. And the western countries are not working or facilitating any peace talks, unfortunately. It’s all about selling more weapons from some countries to Russia, and others giving them to Ukraine. Lots of benefits to the military industrial complex of these countries, and their oil and gas sector, at the expense of Ukraine. Heart breaking does not do it justice. Yes, a ton of damage has been done and is still continuing. Russia is moving more and more toward a “pariah” like state due to its leadership.
Just like oil and gas is shifting away from Russia, so are forest products, sanctions or no sanctions. There must be some end to this insanity!
Nadia, You have summarized the current situation in Russia and Ukraine very well. The people of Ukraine are being used as pawns by the western military-industrial complex. For this reason, I don’t expect any serious peace talks. The Russian forest products sector has always relied on direct foreign investment from the west. This cash infusion has dried up. This is a very interesting time in history for Russia and the world. I expect a regime change in Russia this year whether by coup, resignation, or assassination. The next administration will set the course for Russia’s future. The Russian people, that historically have been disconnected from politics, must get involved. The words are not mine but “the people of a nation will get the government that they deserve” or tolerate. This is true for Russia as well as the USA. All this being said, there are opportunities in Russia. Largely created out of chaos. Our mills are operating at 80+% and I’ve started a reman plant near Khabarovsk in the Russian Far East that will produce pine selects. We have challenging times ahead so I’m buckled in for a wild ride.
Very interesting to hear your perspective @David_Bagdy.
Is the intent for the plant in Khabarovsk in the far east to be exporting wood to Japan, China, Korea, and South East Asia?
@Andrey_Tikhomirov what are you seeing in the LBM industry in Russia today given the war situation and economic sanctions? Has the industry “re-tooled” so to speak?
Our plant in Khabarovsk is remanufacturing Siberian Pine which yields a very high percentage of selects ( clear pine ). All of the selects are destined for North America. Any lower grade that develops is being sold in the local market.
What is the reasoning for why selects are destined for North America?
In Russia, we produce very high-quality boards, 1x4, 1x6, & 1x8. Our “2 & Btr Premium” typically grades out with 40%-60% #1 Common. It’s a higher quality product than the Europeans produce.
Siberian Pine is very similar to Ponderosa Pine. We were able to secure a long-term commitment for raw materials in the Russian Far East. Our pine select program for North America fits nicely our commitment to supplying high-quality wood products coupled with exceptional packaging.
Hello everyone!
What can I say, of course, the situation in the industry is very difficult, especially in the northwestern part of Russia. I don’t think that in the near future there will be any positive changes related to the forest industry. The European market closed for a long time. It seems to me that at the moment European consumers do not feel any discomfort due to the lack of Russian wood on the market, even if Russian lumber was sold in Europe, then at the current ruble exchange rate, I do not think that this would affect prices.
Demand for sawlogs is gradually increasing, but this is most likely due to a decrease in timber harvesting. I can’t say how much the harvest will decrease this winter, but I think that the reduction will be significant.
David, living in Russia, I see no preconditions for regime change. State coup? Who will be the leader of this coup? In 2008, everyone thought that Medvedev is a liberal leader, but look what he writes now, this is some kind of rider of the apocalypse! But there is a chance that he still disguises himself well!
Hello @Andrey_Tikhomirov thank you for reporting your insights. My question is why? Why is Europe not feeling any pain from lack of Russian wood on the market? Is it because other Eastern European and Scandinavian countries stepped in and are filling the void? The consumption did not slow down significantly in Europe, so this lack of Russian wood must be compensated from other sources in order to prevent prices from skyrocketing as expected in times of shortage? Spasibo!
Zdravstvuyte, @Nadia!
Maybe, I am wrong, but I wouldn’t say that consumption did not slow down significantly in Europe, I would say that the demand for wood very decreased. Some of my clients say this.
However, they look positively at the second quarter of this year. The market is already feeling better, although prices are still very low. Even considering positive market movements, Europe will be able to provide itself with lumber for a couple of years ahead. As @Matt_Layman said in March 2022, this is The Great Lumber Shuffle. The Scandinavian countries will take the market that Russia had in Europe. Russian companies will provide wood to Chinese market, so that the demand for European and North American lumber from China will be much lower. I think that there will be no shortage of lumber in Europe this year.
If earlier one of the advantages of Russian wood was the price, now this advantage is gone. The exchange rate of the ruble and the cost of logistics make Russian timber uncompetitive.
As far as I know, there is a shortage of birch plywood in Europe, but Kazakhstan and Turkey 
will close this shortage, in case that the European customs does not change its attitude towards wood from these countries.
Hello @Andrey_Tikhomirov thank you for this insightful post! So @Matt_Layman 's Great Lumber Shuffle actually came to fruition it seems – Matt is quite a visionary here!
Regarding birch plywood, do you mean that the sanctions and tariffs on Russian wood enable Kazakhstan and Turkey to sell birch plywood to Europe because their prices are just as competitive but their products are not laden with sanctions and tariffs?
@David_Stallcop have you seen Turkish and Kazakh birch plywood in Europe by any chance? Curious how wide spread it is this quarter … Perhaps @David_Bagdy also has some observations here.
Thanks Nadia. 
Exactly! I’ve heard that the plywood is Russian in fact, but Kazakh according to the documents. So European restrictions do not apply to this plywood. But these are just rumors. 
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