Russian Forestry and Wood Supply Operations Analysis
WOODWORKING
WOODWORKING
Diagram 8. Housing commissioning trends in Russia
in 2002-2013
million m²
80
70
60
50
■Total housing built
Low-rise houses
Wooden houses
50,6
43,6
41,0
40
36,4
33,8
40
30
20
68,3
66,1
65,7
62,3
61,2
59,9
58,4
26,3
27,4
28,5
28,4 28,7
26,8
25,5
20,0
14,2
15,2
16,1
17,5
10
6,2
2,2
2,8
3,7
4,0
4,4
H
6,6
7,3
6,6
7,0
7,1
7,1
20
0
2002 2003
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: Association of Wooden Housing Construction, Rosstat, WhatWood
Diagram 9. Average import prices of OSB in Russia
340,1
$/M³
400,0
350,0
300,0
250,0
200,0
150,0
100,0
in Russia dropped by 16%
50,0
0,0
For 11 months of 2014 the
average import prices of OSB
01.01.2013
01.02.2013
01.03.2013
01.04.2013
01.05.2013
01.06.2013
01.07.2013
01.08.2013|
01.09.2013
01.10.2013
01.11.2013|
01.12.2013
01.01.2014
01.02.2014 |
01.03.2014
01.04.2014
01.05.2014
01.06.2014
01.07.2014
01.08.2014
224,8
01.09.2014
01.10.2014
01.11.2014
Source: customs data, WhatWood estimates
Diagram 10. Forecast of export, consumption and import
of OSB in the Russian market in 1997-2025
1,000 m³
2000
Production
1500
Exports
First production
1000
500
0
-500
Imports
Consuption
facility of OSB,
Hillman
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
44
#6 (2015) RUSSIAN
FORESTRY
2008
2009
2010
2011
2012
2013
2014
2015
forecast
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
consumer markets. On the contrary, the weak
pace of recovery of the economy and construction
sector in Europe do not provide an adequate
demand for boards in the local market, and sales
are made up for by the demand from Russia. It is
quite likely that this situation will last till 2018
or 2019, when another one or two large-scale
projects will be launched in Russia, with the
volume of imports gradually fading at a rate
of 1% to 3% per year. A probable scenario is
that shipments of Russian OSB to CIS countries
(especially Kazakhstan and Uzbekistan) will
begin, as is already the case with chipboards
and fiberboards.
Source: WhatWood
This scenario does not provide for the possibility
of an OSB production boom on the Asia market,
for example in China. This can be compared with
plywood, one of the main substitute products for
OSB. In the period from 2003 to 2013 plywood
production in China increased by almost 23 million
m³ to 44.7 million m³ per year (diagram 7). If OSB
takes root in China, the country could become
one of the biggest exporters of OSB, including
to Russia. A prerequisite for the development of
this scenario is the emerging shortage of quality
raw materials for the production of plywood.
Chinese manufacturers are increasingly looking
for suppliers of raw materials in foreign markets,
while the volumes of planted wood so far do not
allow to fully cover the demand for raw materials.
The key driver of OSB consumption is the
construction and repairs industry. A positive aspect
is the trend towards an increased share of wooden
houses in the total volume of construction. In
the period from 2002 to 2013, the total area of
houses built of wood rose from 2.2 million m² to
7.1 million m² (diagram 8). However, the volumes
of new housing are still significantly lower than
what was the case in the Soviet Union.
If we were to assume that several factories with
the total volume of 1.2-1.5 million m³ per year
were launched in Russia within the next two to
three years, with a steady import of 600,000-
700,000 m³ per year, there would be a marked
increase in competition among manufacturers
for markets. In such a case, a drop in prices for
OSB in the domestic market can be predicted.
As to imported boards, the average weighted
prices of boards has been dropping since November
2013 after a peak in June 2013 ($340). By
November 2014, the price of 1 m³ of OSB was
$225 (diagram 9).
One possible scenario depicting export, import
and consumption of OSB in the Russian market
until 2025 is given below (diagram 10).
WhatWood, 2014
Note: This review was written with the aid of the
"OSB Market in Russia" report that was undertaken
in the first half of 2014 and does not take into
account risks that have arisen since that time
against a background of geopolitical tension, the
strong devaluation of the national currency and a
total reduction in the growth of Russia's economy.
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