WhatWood: In Q1 2014, average export price for Russian sawn timber rose 0.2%

The average price of sawn timber exported from Russia following the results of the first quarter of 2014 amounted to $176.3, which is 0.2% higher than a year ago. Compared to Q4 2013, prices increased by 1%. However, within the quarter itself the dynamics was descending. According to analysts of WhatWood agency, the main reason is the reallocation of trade flows from high-price Japanese market towards the Chinese one.

China

Price dynamics in Q1 2014 were mixed in this country. Price of pine sawn timber increased by 6% to $122.8 per m3 compared to the same period of 2013 on terms DAF Zabaikalsk. On DAF Naushki terms, price decrease amounted to 17%, down to $79.7/m3. On DAF Grodekovo terms, prices grew by 28% to $177.7/m3. Larch sawn timber grew in price to $151/m3, by 8% compared to Q1 2013. China remains one of the world leaders in consumption of timber. The positions of the Russian suppliers have greatly improved over 2012-2013 compared to companies from North America. Prohibition of industrial felling in state forests of Heilongjiang province for a short time allowed to increase volumes and prices, however, Russian exporters find it more and more difficult to retain customers and increase sales prices.

Japan

After the absolute historical maximum in November 2013, prices for Russian sawn timber went on a catastrophic decline. Exporters for a long time were bullish on the market, and by early 2014, the demand for Russian products began to decline. Importers and wholesalers reduced the volume of purchases, however, the stocks of Russian timber in Japanese ports remained quite high, putting pressure on prices. In addition, the Japanese government encouraged local processing, and companies started switching to Japanese cedar. In Q1 2014, prices for Russian pine sawn timber fell by 18% to $339/m3 on CFR Tokyo terms.

Egypt

This country remains an unstable and unattractive market for most suppliers of timber from Russia and Europe. An important role in the reduction of exports to the Middle East belongs to China, which has captured Egyptian deliveries, as both markets consume the same type of timber (as a rule, side-cuts). Prices in Q1 2014 rose by 24% relative to Q1 2013 to $232/m3 on FCA Novorossiysk terms.

Europe

In Europe, demand for Russian timber in Q1 2014 was stable, which was due to gradual recovery of the economy and the construction sector in particular. Exporters, however, do not expect growth in this region and rather focus on stable exports of expensive grades. The price of larch lumber on FCA St. Petersburg terms grew by 4% to $342/m3 in Q1 2014.

Full article as well as charts with delivered base prices for Russian sawn timber in different countries are available in digital Russian Timber Journal.