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China’s import of Russian plywood has increased by 1.5 times, becoming a unique “corridor” for the supply of wood products in the western market

China becomes gateway for Russian plywood to Western markets

The company “Russian Forest Information” told RBC newspaper that from January to September 2022, the delivery of plywood from Russia to China will increase by 1.5 times. Information Office Manager Pavel Chasin pointed out that due to the imposition of sanctions, China has become a unique “corridor” for Russia to supply timber products to Western markets.

The total cost of supplying plywood to China doubled to $175 million. According to the company “Russian Forest Information”, some 9.9 million cubic meters of Russian timber worth $2.3 billion were exported to China in nine months.

Company manager Pavel Chasin pointed out that China’s interest in Russian plywood is due to the closure of Western markets in Russia after the imposition of sanctions. He explained: “Russian plywood has no competitors in the world market. Despite the sanctions, the demand in the EU and the US has not diminished. So China acts as a gateway for Russian sawn timber and products made in China from domestic logs to Europe and the United States.”

18mm melamine faced plywood
The European Union imposed a ban on the supply of timber and wood products from Russia in April and it came into effect on July 10.

China’s convenient transportation network and advanced technology provide a strong guarantee for this plywood trade

Yevgeny Ogorodnikov, an analyst at the “Expert” magazine, believes that China’s peace-loving policy contempt for European hysteria, neither responds to the conventional challenges of the United States, nor conflicts with Russia, while constantly Achieve one economic result after another. Yevgeny Ogorodnikov said: “China still has millions of cheap laborers who have improved their skills in recent years. China has a developed energy infrastructure based on modern coal-fired thermal power plants, a huge Port hubs, the best road and rail network in the world – all of these create the most comfortable environment for big business. As a result, it is China that has already benefited economically from the political situation of the crisis in Europe.”

Russia’s “Magnet” chain is the first Russian grocery retailer to conduct logistics tests via the Northern Sea Route. Six 40-foot container ships “Monchegorsk” loaded with daily consumer goods left China and were directly shipped to St. Petersburg port via Russia’s Arctic sea route. According to the company’s website, the planned travel time is about 30 days. The shipment will arrive in Russia at the end of November.

Considering the heavy workload at the port of Vladivostok, the delivery time of goods from China via the Northern Sea Route will be ten days less than using intermodal transport, and cost savings for retailers due to the launch of the current new line transport Tariffs can be as high as 15%.

The unique logistics method provides a lot of convenience for the  plywood transaction

Dmitry Relik, director of the Agricultural Market Situation Research Institute, believes that the “Magnet” test of the Northern Sea Route traffic is a good job: first, sea freight is usually cheaper than rail freight; second, the Trans-Siberian Railway The load was heavier, so an alternative route had to be developed. Dmitry Relik explained:

“But the problem is that the Northern Sea Route is not a tested route, we don’t know how well it will work in terms of frequency and volume of shipments, cadence and associated risks. Also, not all food cargoes are suitable for this route.”

If the test proves that this route is effective, the company will start regular shipments via the Northern Sea Route in the spring of 2023, and deliver continuously in the three seasons of spring, summer and autumn. Potentially, the trade network could supply large quantities of non-food products from China and countries in the Asia-Pacific region along the new route and distribute them to large logistics complexes in central and southern Russia. In addition, the passage of the “Magnet” through the Northern Sea route will increase the loading capacity of the port of St. Petersburg, whose workload has decreased due to sanctions.

                                                                                    News source: Russia Ural Forest Industry Group
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