Monthly Report # 1 (3)
Russian Lumber
Industry Insights
January 2024
The monthly report provides a comprehensive analysis of the Russian
lumber sector, highlighting production dynamics, supplier shifts,
market prices, and Russia's role in the international lumber trade.
www.lesprom.com
Summary
Contents
In 2023, Russia's lumber industry saw a 1.1%
decline in production to 28.7 million m³, while
exports dropped by 10.1% to 21.9 million m³.
Last year, new housing starts in Russia increased
by 7.5%, but the number of construction permits
issued fell by 15.5%. Lumber consumption in
Russia for 2023 is estimated at 15.9 million m³.
Summary
Russia
China
Japan
Egypt
Europe
USA
Price indices
Russian exporters
Supply History
Capacity expansions
In December, prices for softwood lumber from
Russia in China increased by 5% compared to
November, while those from Canada and Finland
rose by 2%. China's economy grew by 5.2% in
2023, marking one of its weakest growth rates in
decades. However, China's December PMI data
indicates improved manufacturing conditions at
the end of the year. The real estate sector crisis
continues to deepen, with the top 100
developers recording a sharp fall in new home
sales in January. Sales volume decreased by
02
05
12
21
27
30
33
35
35
36
42
34% year-on-year, marking the worst sales
month since July 2020.
Japan experienced a significant drop in
softwood lumber imports in 2023, reaching the
lowest level on record. Import volume
plummeted to 3.2 million m³, a 33% decrease
Chart 1
Dynamics of purchasing managers' indexes in the manufacturing sector
Source: S&P Global
Lesprom Network: Russian Lumber Industry Insights, January 2024
2
from the previous year, and half of what it was six
years ago. Russian lumber exports to Japan fell
by 40%, totaling only 467,000 m³ in 2023. An
increase in demand for softwood lumber is
expected in Japan in the coming months due to
reduced supplies from Finland and Sweden, and
the need to rebuild buildings destroyed in the
January earthquake.
In December, the price for Russian pine lumber
in Alexandria, Egypt, increased by 11%, though
this was 3.9% lower than the previous year's
level.
The EU economy grew by just 0.5% in 2023. The
International Monetary Fund lowered its GDP
growth forecast for the region to 0.9% for the
Table 1
Prices for Russian lumber
Source: Lesprom Network
Chart 2
Dynamics of prices for Russian lumber
- - Forecast
Source: Lesprom Network
Lesprom Network: Russian Lumber Industry Insights, January 2024
3
year. Construction volumes in the eurozone
decreased by 2.2% in December 2023
compared to the previous month, following a 1%
decline. In November, softwood lumber imports
into the EU countries decreased by 5% from
October. Since July 11, 2022, Russia has ceased
wood product deliveries to European markets
due to EU-imposed sanctions.
The US economy grew by 3.1% last year. A
robust job market supported strong consumer
spending and dispelled recession fears. A year
ago, economists considered a recession very
likely and forecasted modest growth of 0.2% for
2023. This year, with rising home sales, an
increase in lumber consumption is expected. The
recovery in demand for lumber will lead to price
increases and a slight rise in production.
The withdrawal of Most Favored Nation status
for trade with Russia by the United States in
2022 resulted in a sharp decline in the
profitability of Russian lumber exports to the
American market. Whereas exports amounted to
106.5 thousand m3 in 2021, they fell to 7
thousand m3 in 2023.
Lesprom Network: Russian Lumber Industry Insights, January 2024
4
similar to November and remained historically high.
Russia
In December 2023, Russia's manufacturing sector
continued to expand. The S&P Global Russia
Manufacturing PMI, adjusted for seasonal
variations, stood at 54.6 in December, up from
53.8 in November, indicating a significant
improvement in the manufacturing sector's
condition. This growth rate was the highest since
January 2017.
The overall uplift was supported by steady
increases in production volumes and new order
inflows, with the former accelerating to its fastest
pace in seven months. A sharp rise in new sales
encouraged companies to increase their resource
purchases and hire staff at a higher pace.
Companies' optimism is bolstered by steady
customer demand growth.
Costs continued to rise at notable rates, but the
inflation rate slowed to its lowest level in six
months. The pace of increase in output prices was
December saw rapid growth in new sales.
Although this growth was the slowest in three
months, it was driven by an increase in customer
numbers, the launch of new products, and the sale
of higher-quality goods. The main customer
demand was focused on the domestic market,
while the inflow of new export orders decreased for
the second consecutive month. The rate of decline
in new foreign orders was the highest since July.
In 2023, construction in Russia increased.
According to Rosstat, 110.4 million m2 of
housing was commissioned in 2023, which is
7.5%, or 7.7 million m2 more than in 2022. In
December, 17.2 million m2 of housing was
commissioned (+82.2% or +7.8 million m2). The
commissioning of multi-apartment buildings by
developers amounted to 51.8 million m2, which is
13.7%, or 6.2 million m2 more than the volumes in
2022.
In
December
2023,
developers
commissioned 10.8 million m2 of multi-apartment
buildings (+31.0% or +2.6 million m2).
Chart 3
Dynamics of purchasing managers' indexes in the manufacturing sector of Russia
Source: S&P Global
Lesprom Network: Russian Lumber Industry Insights, January 2024
5
At the same time, the number of construction
permits issued in 2023 decreased. According to
the state corporation DOM.RF, 2,532 permits were
issued last year (-15.5% year-on-year). The top 5
regions for construction permits issued included
Moscow (4.7 million m2, 14% of the total
residential area), Moscow Region (2.9 million m2,
9%), Sverdlovsk Region (2.4 million m2, 7%),
Tyumen Region (1.5 million m2, 4%), and the
Republic of Tatarstan (1.3 million m2, 4%).
Builders of wooden houses expect that in 2024 the
demand for wooden houses or houses built using
wooden structures will be the same as in 2023.
Regarding lumber, they have already received
notifications from suppliers about a price increase
of 2000 rubles per m3. There is inflation in Russia,
an increase in labor costs, rising prices for gasoline
and equipment. All this affects the cost of lumber,
and manufacturers can no longer keep prices at
last year's level. In addition, there are severe frosts
in some regions of Russia, so logging is not being
carried out. Potentially, this will affect the sawlog
availability. Most likely, the volume of logging in
2024 will be less than last year.
According to Roslesinforg, the total volume of
lumber and roundwood exports from Russia in
2023 amounted to 25 million m3, slightly below the
2022 totals (27 million m3). Compared to presanction levels, the reduction was 38.5%.
The volume of industrial lumber production in
Russia in 2023, according to Rosstat, was 28.5
Table 2
Floor area of buildings completed in Russia
Source: Rosstat
million m3, 4.5% less than the previous year. At
the same time, Lesprom Network estimates the
total volume of lumber production in the country
decreased by 7% to 37.8 million m3. Lumber
exports decreased by 10.1% to 21.9 million m3.
Thus, lumber consumption in Russia in 2023 is
estimated at 15.9 million m3, 6.5% less than in the
previous year.
In December 2023, the volume of softwood
lumber exports from Russia decreased by 14%
compared to November to 1.27 million m3.
Compared to the previous year, supplies increased
by 8%. China reduced its import of Russian
lumber in December by 12% compared to
November to 950,000 m3. Compared to the same
period last year, supplies increased by 12%.
Uzbekistan, which ranks second in terms of
import volume, reduced its imports compared to
November by 31% to 108,000 m3. Compared to
December 2022, supplies increased by 10%.
Japan is in third place, with supplies to the country
increasing by 32% compared to November to
51,000 m3. The annual export growth was 26%.
Tajikistan's import of softwood lumber decreased
compared to November by 27% to 34,000 m3,
with annual supplies falling by 19%. Egypt rounds
out the top five importing countries with a volume
of 18,000 m3, which is 61% less than in November
and 54% less on an annual basis.
The export of hardwood lumber from Russia in
December 2023 decreased by 17% compared to
November, to 16,000 m3, with annual supplies
falling by 18%. Shipments to China decreased by
14% to 66,500 m3, 24% less than a year ago.
Hardwood lumber exports to Vietnam decreased
by 20% to 8,000 m3, which is 230% more than a
year ago. Uzbekistan ranks third in volume, with a
decrease of 51% to 1,800 m3, a 32% drop on an
annual basis.
In December 2023, the average price of pine
lumber exported from Russia, GOST 26002-83,
GR from 22%, grade 1-3, increased by 1.5% to
13,991 rubles per m3. On an annual basis, the
price increased by 17.9%. Softwood lumber,
GOST 8486-86, GR from 22%, grade 1-3,
increased by 2.3% to 14,435 rubles per m3,
Lesprom Network: Russian Lumber Industry Insights, January 2024
6
Chart 4
Dynamics of the area of completed construction in Russia
Source: Rosstat
Table 3
Lumber production in main regions of Russia
Source: Rosstat
Lesprom Network: Russian Lumber Industry Insights, January 2024
7
Chart 5
Dynamics of lumber production in main regions of Russia
Source: Rosstat
20.8% more than a year ago.
over an area of 60 million ha (+50%).
In December 2023, the State Duma considered a
new bill that defines the concept of forest roads
and their classification, who can create them, and
on which plots. The bill proposes to classify forest
roads for forestry activities and for access to the
plot, as well as for the transportation of timber and
other resources from the forest. The bill also
provides for the possibility of creating forest roads
beyond the used forest plots. This regulation is
expected to improve the transport accessibility of
forests, their investment attractiveness, and
simplify logistics and reduce labor costs.
In 2023, Rosleskhoz approved 27 investment
projects for the development of the forestry
industry. For the implementation of the approved
investment projects, the government plans to
provide forest plots with an annual timber
harvesting volume of about 14.5 million m3. The
majority of priority investment projects are currently
being implemented in the Northwestern and
Siberian Federal Districts: 15 and 22 projects,
respectively.
According to Rosleskhoz, in 2023, remote
monitoring in Russia detected nearly a thousand
cases of illegal logging, totaling about 200,000
m3, valued at approximately 2.6 billion rubles.
Remote monitoring of forest use was conducted in
40 regions of the country over an area of 250
million ha (+14%), including continuous monitoring
Lesprom Network: Russian Lumber Industry Insights, January 2024
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Table 4
Distribution of softwood lumber exports from Russia by country
Source: Lesprom Network
Chart 6
Dynamics of softwood lumber exports from Russia by country
Source: Lesprom Network
Lesprom Network: Russian Lumber Industry Insights, January 2024
9
Table 5
Distribution of hardwood lumber exports from Russia by country
Source: Lesprom Network
Chart 7
Dynamics of hardwood lumber exports from Russia by country
Source: Lesprom Network
Lesprom Network: Russian Lumber Industry Insights, January 2024
10
Table 6
Prices for softwood lumber on domestic market in Russia
Source: Lesprom Network
Chart 8
Dynamics of prices for softwood lumber on domestic market in Russia
Source: Lesprom Network
Lesprom Network: Russian Lumber Industry Insights, January 2024
11
China
production this year, expecting stronger global
demand, increased customer spending, and
investments in new products.
China's economy expanded by 5.2% in 2023,
marking one of its weakest growth performances
in recent decades. December PMI data from China
indicates an improvement in the country's
manufacturing conditions towards the end of last
year. Companies reported stronger growth in
production and new orders amid strengthening
market demand, although new export orders
continued to decline, albeit at the slowest pace in
the last six months.
In January, the official manufacturing PMI index
showed a slight improvement but remained below
the contraction threshold. Beijing is expected to
ease monetary policy in the coming months,
including cutting interest rates, to support
manufacturing and infrastructure activity. However,
without stimulating consumption, economic
prospects will be limited.
In December, the PMI rose to 50.8, signifying the
sector's improvement for the fourth time in the past
five months. New orders grew, supporting an
increase in production. However, buying activity
stagnated, and companies utilized existing
inventories to reduce costs. Raw material costs
continued to rise, but the rate of inflation
decreased. Due to market competition, companies
only marginally increased their selling prices.
Chinese manufacturers anticipate an increase in
The slowdown in China's real estate sector has
severely impacted the country's economy,
worsening the situation. According to China Real
Estate Information, the top 100 developers
recorded a sharp decline in new home sales in
January, with sales totaling $32.83 billion, 34%
less than the previous year, marking the worst
sales month since July 2020.
This significant reduction in housing sales
underscores the substantial challenges faced by
Chinese officials in their efforts to revive the
Chart 9
Dynamics of purchasing managers' indexes in manufacturing sector of China
Source: S&P Global, National Bureau of Statistics of China
Lesprom Network: Russian Lumber Industry Insights, January 2024
12
economy, which is struggling on multiple fronts.
Real estate data was released on the same day as
other negative news: a fourth consecutive month
of contraction in the Chinese manufacturing sector.
2024. Preferential import tariffs below mostfavored-nation rates will be applied to 1010
products. For wood products, there will be six tariff
rates – 3%, 4%, 6%, 7%, 8%, and 12%.
Chinese policymakers have intensified their efforts,
amending real estate sector regulations and taking
steps to increase liquidity in the banking system.
On January 12, a "white list" of real estate projects
eligible for bank lending was announced, with the
first loan under this initiative granted to a project in
Nanning.
In December, sawmills in Northern China halted
their operations due to severe cold weather. With
inventories around 2.4 million m3 and daily port
shipments within 60-70 thousand m3, the cold
weather disrupted operations and led to a drop in
wholesale log prices. The CFR selling price for
Class A pine logs in China varied in December
between $127-130 per m3, according to PF Olsen.
Many developers have defaulted on their foreign
debts, leaving millions of homes unfinished. The list
of troubled developers includes China Evergrande,
which was liquidated by a Hong Kong court.
Shanghai authorities have eased home-buying
rules, but economists say Beijing needs to make
deeper changes to address its problems,
particularly focusing on domestic consumption.
On December 21, 2023, China's Tariff
Commission announced adjustments to import
and export tariff rates effective from January 1,
After the Chinese Lunar New Year, in February, log
inventories are expected to increase to
approximately 2.5 million m3. However, prolonged
weather conditions may lead to further stock
increases.
In 2023, log supplies to China totaled 28 million
m3, compared to 48 million m3 in 2021. The
decline in imports was due to Russia, a major log
supplier to China, banning the export of logs in
2021. Northern Europe accounted for about 33%
Chart 10
Dynamics of area of completed construction in China
Source: National Bureau of Statistics of China
Lesprom Network: Russian Lumber Industry Insights, January 2024
13
Table 7
Area of completed construction in China
Source: National Bureau of Statistics of China
of China's total log imports in 2021, thanks to a
large quantity of beetle-damaged timber.
In 2024, demand for lumber in China is likely to
reach a low point before gradually increasing. The
situation in China's construction sector may not
begin to improve until 2025.
In December 2023, imports of softwood lumber
to China increased by 6% to 1.55 million m3 yearon-year, but annual imports decreased by 7%.
Three of the five largest supplier countries
increased their shipments to China, except for
Russia (-7% to 913 thousand m3) and Belarus
(-2% to 92 thousand m3). Finland increased its
exports to China by 67% to 126 thousand m3,
13% less than the previous year. Canada increased
shipments by 10% to 115 thousand m3, 18% less
year-on-year.
Imports of hardwood lumber (including tropical)
to China in December 2023 decreased by 6% to
756 thousand m3 compared to November. Yearon-year, shipments increased by 11%. Thailand is
the largest supplier of hardwood lumber to China,
Chart 11
Dynamics of real estate sales in China
Source: National Bureau of Statistics of China
Lesprom Network: Russian Lumber Industry Insights, January 2024
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with shipments to China decreasing by 5%
compared to November to 381 thousand m3. U.S.
exports to China in December decreased by 11%
compared to November, to 73 thousand m3. The
Philippines increased exports to China by 8%
compared to November to 73 thousand m3.
Russia decreased exports to China by 29%
compared to November to 59 thousand m3.
more expensive at $199 per m3. Sweden reduced
prices for softwood lumber by 2% to $182 per m3.
The average price of hardwood lumber from
Thailand in China decreased by 1% to $242 per
m3. U.S. lumber became 1% more expensive at
$713 per m3. Russian lumber became 9% more
expensive at $293 per m3, with the annual price
increasing by 13%.
In December 2023, the average price of Russian
softwood lumber in China was $200 per m3, 5%
higher than the average price in November. The
average price of Canadian lumber increased by 2%
to $167 per m3. Finnish lumber also became 2%
In December, the average price for pine lumber
(25-50×75-100×4000 mm, R/S, grades 1-4,
26002-83, KD 18-22%) increased by 18% to $213
per m3, only 1% more than the previous year.
Spruce lumber (25-50×75-100×4000 mm, R/S,
Table 8
Real estate sales in China
Source: National Bureau of Statistics of China
Chart 12
Dynamics of real estate sales in China, 2000-2023
Source: National Bureau of Statistics of China
Lesprom Network: Russian Lumber Industry Insights, January 2024
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grades 1-4, 26002-83, KD 18-20%) saw a price
increase of 5% to $189 per m3 compared to
November, and the annual price increase was
10.8%.
content 18-20%) increased in price by 3.9% to
$111 per m3 compared to November 2023.
Compared to December 2022, the price fell by
33.6% ($167 per m3).
Birch lumber (FCA, 25-50×60-100×2000-3100
mm, unplaned, grades 1-4, 2695-83, moisture
Table 9
Distribution of softwood lumber imports to China by supplying countries
Source: Lesprom Analytics, China Customs
Chart 13
Dynamics of softwood lumber imports to China
Source: Lesprom Analytics, China Customs
Lesprom Network: Russian Lumber Industry Insights, January 2024
16
In January 2024, Russian lumber exporters were
cautiously optimistic about price growth and
demand in China during the first half of the year.
This could be supported by factors such as
seasonal demand, reduced imports of softwood
logs from key supplying countries, primarily
Europe, and China's announced plans to revitalize
its economy, particularly overcoming the
construction crisis.
In the first ten days of January, due to shipping
restrictions in the Red Sea, the freight cost from
Europe increased from 15 to 35 euros per cubic
meter of lumber. Delivery times increased by ten
days. With low levels of softwood lumber stocks in
Chinese ports, suppliers noted an increase in
Table 10
Distribution of hardwood lumber imports to China by supplying countries
Source: Lesprom Analytics, China Customs
Chart 14
Dynamics of hardwood lumber imports to China
Source: Lesprom Analytics, China Customs
Lesprom Network: Russian Lumber Industry Insights, January 2024
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importer activity. However, demand in China for
Russian birch lumber decreased.
According to Lesprom Network estimates, in
January 2024, the average price of Russian pine
lumber in China was $235, the price of spruce
lumber was $195, and the price of birch lumber
was $115 per m3.
Table 11
Prices for softwood lumber in China by supplying countries
Source: Lesprom Analytics, China Customs
Chart 15
Dynamics of prices for softwood lumber in China
Source: Lesprom Analytics, China Customs
Lesprom Network: Russian Lumber Industry Insights, January 2024
18
Table 12
Prices for hardwood lumber in China by supplying countries
Source: Lesprom Analytics, China Customs
Chart 16
Dynamics of prices for hardwood lumber in China
Source: Lesprom Analytics, China Customs
Lesprom Network: Russian Lumber Industry Insights, January 2024
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Table 13
Prices for Russian lumber in China
Source: Lesprom Network
Chart 17
Dynamics of prices for Russian lumber in China
Source: Lesprom Network
Lesprom Network: Russian Lumber Industry Insights, January 2024
20
Japan
In December, Japan's manufacturing sector
continued to contract, with an acceleration in the
decline of production volumes and new orders
amid client uncertainty in both domestic and
international markets. High raw material inflation
reached a three-month peak, while the rise in
product prices slowed. Companies remain
confident about the future, anticipating the launch
of new products and improved demand.
The December PMI for Japan's manufacturing
industry remained below the threshold value of
50.0 for the seventh consecutive month, dropping
to 47.9 from 48.3 in November. This indicates an
acceleration of activity contraction to the highest
rate since February 2023. Manufacturers reported
decreases in both production and new orders. For
17 consecutive months, manufacturers have been
reducing their purchasing activity due to a lack of
new orders and production needs, hindering the
procurement of new resources.
In January 2024, a magnitude 7.6 earthquake
occurred in Central Japan, most severely affecting
Ishikawa Prefecture on the Noto Peninsula, where
12,000 homes were destroyed across 17
municipalities. In Suzu City, located on the edge of
the Noto Peninsula, only 51% of approximately
6,000 homes met national seismic resistance
standards, compared to the national average of
87%. Rebuilding the destroyed buildings will
require a significant amount of construction
materials.
Before the earthquake, major Japanese
companies expected the country's economy to
grow in 2024 despite inflation, with a projected
economic growth of 1%, slower than the 1.7%
planned for 2023. However, the earthquake's
aftermath could negatively impact the economic
situation in the coming months.
Consumer price inflation in Japan continued to
slow down in December amid falling energy prices.
The overall consumer price level in December rose
by 2.6% year-on-year, compared to a 2.8%
Chart 18
Dynamics of Purchasing Managers' Index in manufacturing sector of Japan
Source: S&P Global
Lesprom Network: Russian Lumber Industry Insights, January 2024
21
increase in November. This is still above the Bank
of Japan's inflation target of 2%. Consumer price
inflation excluding volatile fresh food and energy
increased by 3.7% compared to last year, versus a
3.8% increase in November.
By the end of 2023, the yen weakened to 145
against the dollar. In response to inflation, Prime
Minister Fumio Kishida has called on corporations
to raise wages above price increases, which will be
particularly important in 2024 when the Bank of
Japan considers changing its negative interest rate
policy based on spring wage negotiations.
Japan's
construction
sector
is
facing
difficulties: according to a survey by Tokyo Shoko
Research, Ltd., 82 building repair companies
went bankrupt in January this year due to weak
sales. The Japanese Ministry of Finance reported a
decrease in the start of new housing units in the
first 11 months of 2023 to 738,237 units compared
to 747,870 units for the same period in 2022,
representing a 1.29% decline. The slowdown in
construction activity directly affects the demand for
Table 14
Number of new housing starts in Japan
Source: Japanese Government Statistics
Chart 19
Dynamics of number of new housing starts in Japan
Source: Japanese Government Statistics
Lesprom Network: Russian Lumber Industry Insights, January 2024
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lumber.
only 467,000 m3 in 2023.
Japan experienced a sharp decline in the import
of softwood lumber in 2023, reaching the lowest
level since records began. Import volumes
plummeted to 3.2 million m3, 33% less than the
previous year, halving the volume from six years
ago. The value of lumber imports decreased by
56% to $1.23 billion. The average price of
softwood lumber fell by 35% to $385 per cubic
meter, according to Lesprom Analytics.
In December 2023, Japan's import of softwood
lumber decreased by 8% to 274,000 m3
compared to November. Year-on-year, imports
increased by 3%. Canada reduced its supply
volume by 1% compared to November to 78,000
m3, 45% more than the previous year. Sweden
surpassed Russia in the volume of softwood
lumber shipments to Japan. Sweden's exports
increased by 13% compared to November to
60,000 m3, 23% more than the previous year.
Finland reduced exports by 6% to 45,000 m3, with
annual shipments decreasing by 19%. Russia
increased exports by 13% to 34,000 m3, with
shipments up 19% compared to December
2022. Austria's exports increased by 13% to
14,000 m3, though year-on-year shipments
decreased by 27%.
Canada, historically the largest supplier of
softwood lumber to Japan, reduced exports by
19% to 758,000 m3, accounting for 24% of
Japan's total imports. Finland's exports to Japan
decreased by 31% to 579,000 m3, making up
18.1% of the total volume, while Sweden's exports
fell by 33% to 567,000 m3, accounting for 18% of
imports. Additionally, lumber exports from
Russia to Japan decreased by 40%, totaling
In December, Japan imported 10,900 m3 of
Table 15
Import of softwood lumber to Japan by supplying countries
Source: Lesprom Analytics, Ministry of Finance Japan
hardwood lumber (including tropical species), 2%
less than in November and 4% less than in
December 2022. The US reduced exports by 18%
to 2,100 m3, 24% less than the previous year.
Malaysia decreased shipments by 22% to 1,900
m3, 23% less than in December 2022. Indonesia
increased exports of hardwood lumber to Japan by
21% to 1,600 m3, though exports decreased by
7% compared to December 2022. China reduced
shipments by 3% compared to November to 1,600
m3, with annual exports decreasing by 11%.
Germany's exports totaled 1,000 m3, 41% more
than in November and 14% more than in
December 2022.
In December 2023, average prices for lumber
imported from Russia to Japan, except for birch,
increased. The highest increase (+5% year-onyear) was observed in the price of pine lumber
dobuchi 16×40×3985, +12.3% to $437 per m3.
The
price
of
pine
lumber
mabashira
30×105×3985 rose by 1.3% to $312 per m3, with
the annual price decreasing by 18.1%. The price of
spruce
lumber
mabashira
45x105x2985
increased by 2.1% to $293 per m3, with the annual
price rising by 10.8%. Sangi joist 24x48x3985
increased in price by 3.2% to $289 per m3 in
December. Compared to December 2022, the joist
became cheaper by 40.8%. Pine joist taruki
increased in price by 4.7% to $335 per m3 in
Lesprom Network: Russian Lumber Industry Insights, January 2024
23
December, with the annual price falling by 9.6%.
Birch edged lumber 50-100x100x2400 decreased
in price by 2.3% to $380 per m3 compared to
November.
According to Lesprom Network estimates, in
January 2024, all lumber prices in Japan increased
by $5-10 due to high demand amid reduced
production in Russia and decreased supplies from
Finland and Sweden. The earthquake's aftermath
and the need to rebuild destroyed buildings may
contribute to the increased demand for softwood
lumber in Japan.
Chart 20
Dynamics of softwood lumber imports to Japan
Source: Lesprom Analytics, Ministry of Finance Japan
Table 16
Import of hardwood lumber to Japan by supplying countries
Source: Lesprom Analytics, Ministry of Finance Japan
Lesprom Network: Russian Lumber Industry Insights, January 2024
24
Chart 21
Dynamics of hardwood lumber imports to Japan
Source: Lesprom Analytics, Ministry of Finance Japan
Table 17
Prices for Russian lumber in Japan
Source: Lesprom Network
Lesprom Network: Russian Lumber Industry Insights, January 2024
25
Chart 22
Dynamics of prices for Russian lumber in Japan
Source: Lesprom Network
Lesprom Network: Russian Lumber Industry Insights, January 2024
26
Egypt
The December 2023 S&P Global Egypt
Manufacturing PMI was 48.5, slightly up from 48.4
in November. The PMI improvement was partly due
to an increase in employment at manufacturing
facilities at the end of the year, indicating an
expansion of production capacities and optimism
among companies regarding future activity and the
easing of economic challenges, despite a
reduction in new orders due to slowing demand,
the national currency's weakness, and the ongoing
supply deficit.
Egypt's industrial production reached $85 billion,
with an export share of $35 billion, accounting for
40% of total production. Yahya Elwafik Billa
Abdelmoneim Ahmed, the First Deputy Minister
and Head of the Egyptian Commercial Service,
stated the necessity to increase industrial
production to $250 billion to achieve an export
target of $100 billion.
Egypt's end-of-fiscal-year external financing plans
include raising $4 billion. The government
continues to diversify borrowing on international
markets, including issuing Samurai Bonds worth
75 billion yen (approximately $500 million) in the
Japanese market with a yield of 1.5% for a 5-year
term and Panda Bonds worth 3.5 billion yuan
(approximately $500 million) in the Chinese market.
The Egyptian government has also taken
measures to reduce the debt-to-GDP ratio,
including setting an annual debt burden cap and
extending the debt repayment period to 4 years,
aiming to reduce the debt-to-GDP ratio below 85%
by June 2028.
One challenge the Egyptian government faces is
increasing foreign reserves. Egypt's chronic dollar
shortage, exacerbated by regional instability,
presents a significant problem. According to
Bloomberg Economics analysis, the Egyptian
pound remains under pressure despite large-scale
interventions by the central bank and banking
system. To increase foreign reserves and collect
Chart 23
Dynamics of Purchasing Managers' Indexes in the manufacturing sector of Egypt
Source: S&P Global
Lesprom Network: Russian Lumber Industry Insights, January 2024
27
funds in foreign currency, Egypt began selling land
plots for US dollars.
Investments in Egypt's industrial sector for the
2023/24 fiscal year will amount to 100.7 billion
Egyptian pounds. The investments will focus on
diversifying the production base, supporting
technological progress, and creating jobs. The
industrial sector, providing 3.5 million jobs and
contributing at least 16% to GDP, is planned to
increase from 3.6 trillion Egyptian pounds in the
2022/23 fiscal year to 4.3 trillion Egyptian pounds
in the 2023/24 fiscal year, representing a 19%
growth.
In December 2023, the price of Russian pine
Table 18
Import of softwood lumber to Egypt by supplying countries
Source: Lesprom Analytics, Egyptian Customs Authority
Chart 24
Dynamics of softwood lumber imports to Egypt
Source: Lesprom Analytics, Egyptian Customs Authority
Lesprom Network: Russian Lumber Industry Insights, January 2024
28
lumber
(25-50×75-100×6000)
on
FCARautakangas (Russia) terms decreased by 8.6%
to $160 per m3, 15.8% lower than the previous
year. The same lumber's price in Alexandria port
rose by 11% to $222 per m3, 3.9% lower than last
year's level.
demand, reduced production in Russia, and the
ongoing currency crisis in Egypt. Additionally, a
shift in supply focus from grades 1-4 to grades 4
and 5 is expected.
According to Lesprom Network estimates, lumber
prices in Egypt increased in January due to high
Table 19
Prices for Russian lumber in Egypt
Source: Lesprom Network
Chart 25
Dynamics of price for Russian lumber in Egypt
Source: Lesprom Network
Lesprom Network: Russian Lumber Industry Insights, January 2024
29
Europe
Europe's economy hit a standstill in the last quarter
of the previous year, exacerbated by high
borrowing costs in the eurozone and the impact of
rising energy prices following the outbreak of the
war in Ukraine. The conflict led to a spike in energy
prices in 2022, significantly impacting European
manufacturers.
The crisis in the Middle East, which has led to
difficulties in cargo movement through the Red
Sea, is further increasing costs for European
importers and disrupting European supply chains.
The European Union's statistical agency reported
that the eurozone's GDP remained unchanged in
the last three months of the previous year. Overall,
Eurostat recorded a growth of just 0.5% for 2023,
while the US economy expanded by 2.5%.
The stagnation in European production is unlikely
to last throughout 2024. As wages grow faster
than prices, the decline in real incomes will halt.
In December, the European Central Bank
decided to keep all three key interest rates
unchanged, setting the base rate for loans at
4.5%, for marginal lending at 4.75%, and for
deposits at 4%. According to the European
regulator's expectations, inflation will average
5.4% in 2023, 2.7% in 2024, 2.1% in 2025, and
1.9% in 2026. The ECB's target medium-term
inflation rate is 2%. With inflation expected to
decrease, the ECB is anticipated to lower its key
interest rate towards the end of the year,
stimulating growth by reducing pressure on
household
expenditures
and
business
investments.
The International Monetary Fund forecasts that the
eurozone will grow by 0.9% this year, below its
previous growth forecast of 1.2%. In contrast, it
sees the US growing by 2.1%, against its previous
forecast of 1.5%.
Strong growth in the US and the expected 4.6%
GDP growth in China, according to IMF forecasts,
should offset disappointing results in Europe and
ensure a soft landing for the global economy this
year. The IMF now sees global economic growth at
3.1% this year, the same as last year. This new
forecast is an improvement from the 2.9% growth
the IMF expected in October.
Germany was the weakest of the major European
economies at the end of last year, with a decline in
production in the last quarter. Meanwhile, in
January 2024, inflation in Germany dropped to its
lowest level since June 2021, influenced by a 2.8%
decrease in energy prices. Consumer prices in
January were 2.9% higher than the same month
the previous year and 3.7% higher than in
December 2023.
At the end of 2023, the eurozone's
manufacturing sector continued to decline.
Production volume kept falling, and job cuts at
factories continued for the seventh consecutive
month. The number of new orders decreased,
consumer buying activity declined, and business
confidence rose to an eight-month high. EU goods
manufacturers continued to reduce their
inventories amid a lack of demand pressure, while
suppliers' delivery times improved again, indicating
an increase in spare capacity.
The HCOB Manufacturing PMI in the eurozone,
compiled by S&P Global, rose slightly in December
to 44.4 from 44.2 in November. However, it
remains below 50.0, indicating another month of
deteriorating working conditions for factories in the
EU countries. Manufacturers of intermediate goods
are experiencing the most severe problems.
According to the European Union Construction
Output, construction volumes in the eurozone
decreased by 2.2% in December 2023
compared to the previous month, when the
decrease was 1%.
In November 2023, the import of softwood
lumber into the EU countries decreased by 5%
from October to 174,000 m3. Norway became the
key supplier in the region, increasing deliveries by
13% to 69,900 m3, which is 14% more on an
annual basis. Ukraine, in second place, reduced its
exports by 15% to 58,300 m3, with annual
supplies falling by 32%. Switzerland increased its
export of softwood lumber to the EU in November
by 10% to 14,900 m3, 25% more than a year ago.
Bosnia and Herzegovina reduced exports by 23%
to 9,600 m3, with a year-on-year decrease of 30%.
Canada increased its shipments in November by
12% to 7,900 m3, with exports jumping by 134%
from the previous year.
The volume of hardwood lumber imports (not
included tropical lumber) into EU countries in
Lesprom Network: Russian Lumber Industry Insights, January 2024
30
November 2023 decreased by 8% from October to
35,300 m3, a 43% drop on an annual basis.
Ukraine reduced its exports by 2% to 11,700 m3
in November, with annual supplies falling by 34%.
The US reduced its export of hardwood lumber to
the EU by 20% to 9,900 m3. Bosnia and
Herzegovina increased its shipments by 2% to
5,300 m3, with the annual export volume falling by
42%. Serbia increased its shipments by 5% to
4,200 m3. Uruguay increased its export of
hardwood lumber to the EU by 63% in November
to 1,700 m3.
Since July 11, 2022, Russia has ceased wood
product deliveries to European markets due to
EU-imposed sanctions.
Table 20
Import of softwood lumber to EU by supplying countries
Source: Lesprom Analytics, Eurostat
Chart 26
Dynamics of softwood lumber imports to EU
Source: Lesprom Analytics, Eurostat
Lesprom Network: Russian Lumber Industry Insights, January 2024
31
Table 21
Import of hardwood lumber to EU by supplying countries
Source: Lesprom Analytics, Eurostat
Chart 27
Dynamics of hardwood lumber imports to EU
Source: Lesprom Analytics, Eurostat
Lesprom Network: Russian Lumber Industry Insights, January 2024
32
United States
also stabilization. Private residential investments
fell by 17% in 2022.
In 2023, the US economy grew by 3.1%. A
resilient job market bolstered strong consumer
spending, dispelling fears of a downturn. A year
ago, economists deemed a recession highly
probable, predicting a modest growth of 0.2% for
2023. Instead, the growth last year significantly
exceeded expectations, surpassing the 0.7%
increase in 2022.
However, signs indicate that spending—and the
economy as a whole—cannot maintain such rapid
growth rates. Anticipating a cooldown in
consumer spending, economists predict growth
will slow to 1% this year.
In Q4 2023, the economy expanded by 3.3%
annually, driven by household and government
spending. This quarterly figure represents a
slowdown from the 4.9% summer pace but
remains robust. Economic growth is expected to
continue into 2024, albeit at a much slower rate.
The final three months of the year resembled the
"soft landing" sought by Federal Reserve officials.
Growth was strong, with employers adding nearly
half a million jobs, and inflation cooled to an
annual rate of 1.7%, below the Federal Reserve's
2% target. With inflation moderating, the Federal
Reserve is likely to cut interest rates, supporting
the economy this year.
American consumers, who continued spending
unabated, greatly contributed to the better-thanexpected growth. They increased their spending
on healthcare, dining out, and automobiles in
2023. Holiday season sales exceeded
expectations. Real estate spending remained
stable in real terms compared to the previous
year, reflecting the challenging housing market but
In December, the seasonally adjusted rate of
building permits issued in the US was 1.495
million, according to the US Census Bureau. This
is 1.9% higher than the revised November figure
of 1.467 million and 6.1% higher than December
2022's figure of 1.409 million.
In December, 1.027 million single-family homes
were constructed, 8.6% less than the revised
November figure of 1.124 million. The December
figure for apartments in buildings with five or more
units was 417,000. Overall, more than 1.413
million housing units were commissioned in 2023,
9.0% less than the 2022 figure of more than
1.552 million units.
In November 2023, the US International Trade
Commission (ITC) decided to maintain antidumping and countervailing duties on Canadian
softwood lumber for another five years.
The withdrawal of Most Favored Nation status
for trade with Russia by the United States in
2022 resulted in a sharp decline in the
profitability of Russian lumber exports to the
American market. Whereas exports amounted
to 106.5 thousand m3 in 2021, they fell to 7
thousand m3 in 2023.
Table 22
Import of softwood lumber to U.S. by supplying countries
Source: Lesprom Analytics, USDA
Lesprom Network: Russian Lumber Industry Insights, January 2024
33
Chart 28
Dynamics of softwood lumber imports to U.S.
Source: Lesprom Analytics, USDA
Lesprom Network: Russian Lumber Industry Insights, January 2024
34
Price Indices and Supply History
Table 23
Price indices for Russian lumber in December 2023
Source: Lesprom Network
Table 24
15 largest Russian companies by export volume
Source: Lesprom Network
Lesprom Network: Russian Lumber Industry Insights, January 2024
35
Chart 29
Retrospective of softwood lumber exports from Russia to China
Source: Lesprom Network
Chart 30
Retrospective of softwood lumber exports from Russia to Egypt
Source: Lesprom Network
Chart 31
Retrospective of softwood lumber exports from Russia to Japan
Source: Lesprom Network
Lesprom Network: Russian Lumber Industry Insights, January 2024
36
Chart 32
Retrospective of softwood lumber exports from Russia to CIS countries
Chart 33
Chart 34
Main export destinations for softwood
lumber from Russia, 000 m3
Major exporting countries of softwood
lumber to China, 000 m3
Chart 35
Chart 36
Major exporting countries of softwood
lumber to Japan, 000 m3
Major exporting countries of softwood
lumber to Egypt, 000 m3
Lesprom Network: Russian Lumber Industry Insights, January 2024
37
Table 25 (Part 1)
Investment projects for expanding lumber production capacities in Russia / In progress
Source: Lesprom Network
Lesprom Network: Russian Lumber Industry Insights, January 2024
38
Table 25 (Part 2)
Investment projects for expanding lumber production capacities in Russia / In progress
Source: Lesprom Network
Lesprom Network: Russian Lumber Industry Insights, January 2024
39
Table 25 (Part 3)
Investment projects for expanding lumber production capacities in Russia / In progress
Source: Lesprom Network
Lesprom Network: Russian Lumber Industry Insights, January 2024
40
Table 25 (Part 4)
Investment projects for expanding lumber production capacities in Russia / In progress
Source: Lesprom Network
Lesprom Network: Russian Lumber Industry Insights, January 2024
41
Table 25 (Part 5)
Investment projects for expanding lumber production capacities in Russia / In progress
Source: Lesprom Network
Lesprom Network: Russian Lumber Industry Insights, January 2024
42
Table 26 (Part 1)
Investment projects for expanding lumber production capacities in Russia / Completed
Source: Lesprom Network
Lesprom Network: Russian Lumber Industry Insights, January 2024
43
Table 26 (Part 2)
Investment projects for expanding lumber production capacities in Russia / Completed
Source: Lesprom Network
Lesprom Network: Russian Lumber Industry Insights, January 2024
44
Table 26 (Part 3)
Investment projects for expanding lumber production capacities in Russia / Completed
Source: Lesprom Network
Lesprom Network: Russian Lumber Industry Insights, January 2024
45
Table 26 (Part 4)
Investment projects for expanding lumber production capacities in Russia / Completed
Source: Lesprom Network
Lesprom Network: Russian Lumber Industry Insights, January 2024
46
Table 26 (Part 5)
Investment projects for expanding lumber production capacities in Russia / Completed
Source: Lesprom Network
Lesprom Network: Russian Lumber Industry Insights, January 2024
47
Table 26 (Part 6)
Investment projects for expanding lumber production capacities in Russia / Completed
Source: Lesprom Network
Lesprom Network: Russian Lumber Industry Insights, January 2024
48
Table 27 (Part 1)
Investment projects for expanding lumber production capacities in Russia / Implementation has not yet begun
Source: Lesprom Network
Lesprom Network: Russian Lumber Industry Insights, January 2024
49
Table 27 (Part 2)
Investment projects for expanding lumber production capacities in Russia / Implementation has not yet begun
Source: Lesprom Network
Lesprom Network: Russian Lumber Industry Insights, January 2024
50
Research Methodology
Lesprom Network Inc.
Email: office@lesprom.com
www.lesprom.com
This report is provided for informational purposes. The report contains current information on the
state of major global lumber markets, including lumber price indices calculated by Lesprom Network.
The conclusions and statements made in this analytical report are assumptions that may differ from
actual results and may be changed without notice. All opinions, assumptions, and estimates
contained in this report are the opinion of Lesprom Network analysts at the time of this report's
preparation. The list of investment projects presented in this analytical report is not exhaustive and
may be supplemented and changed. Lesprom Network is not responsible for any losses or damage
incurred as a result of using the information contained in this report in any way.
Methodology for calculating the price index
Indices are calculated based on data obtained by Lesprom Network through surveys of lumber
manufacturers and exporters, analysis of customs statistics of states involved in lumber trade. The
indices reflect prices for lumber delivered to major global markets. The prices for the current and
previous months are the average prices at which transactions were made between the seller and the
buyer. Prices for lumber on export markets are indicated in US dollars, prices for lumber sold on the
domestic market are calculated at the average monthly ruble to dollar exchange rate. The method of
calculating the index is fixed.
What PMI indices show
PMI indices measure the change in business activity from one month to another. A score above 50
means that business is growing, and a score below 50 means that business is contracting. Indices
are calculated based on questionnaires sent to company purchasing managers, asking them to
compare this month's activity with last month's.
How the official PMI and Caixin PMI of China differ
The official PMI has a larger sample than Caixin: 3200 and 650 companies, respectively. The official
PMI pays more attention to large state-owned companies, while Caixin PMI focuses more on private
and export-oriented companies. The government usually sees a more positive picture than the
private index, so the indices differ.
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holds exclusive copyright ownership of this document. This analytical report is designed for the
designated recipients only and may not be redistributed or transmitted to unauthorized parties.
Unauthorized copying, electronic dissemination, or sharing of this report, including any pricing
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