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Will lumber prices rise yet? So how might America affect the price of lumber again?

Exploring the зotential Rise in Lumber Prices: America's Role

Boldly Navigating the Lumber Market: Unpredictable Trends and Rising Prices

In the world of timber trading, one thing remains constant: the cyclical ebb and flow of lumber prices. Traditionally, the first quarter of the year — January through March or April — sees a downtrend. This is a pattern observed not just this year, but in past years as well, and is likely to continue in the future. Pavel Karnaukh, President of the Russian Timber National Association, corroborates this view. He expects the arrival of the winter logging season, marked by an influx of fresh raw materials, to trigger a decrease in prices. However, he predicts this dip to be short-lived, as the advent of the construction season in April and May may spur price growth in the domestic market once again. A Bullish Outlook: From Domestic to Foreign Markets Timber producers are also optimistic about opportunities in international markets. Already, there are encouraging signs of strong demand from countries like China at the start of the year. But the true wild card is the United States. There is much speculation surrounding their potential demand, as the country is gearing up for significant investments in large-scale infrastructure projects that may necessitate substantial timber imports. Should this transpire, it may kickstart another meteoric rise in lumber prices. An Analysis of Profitability: The Timber Industry's Upturn In recent years, profitability has seen a marked uptick for major and medium-sized logging companies. From a mere 3.3%, profitability levels swelled to 17.7% last year. Despite this impressive nearly fivefold increase in profitability, it hasn't resulted in additional income for companies in the timber processing sector, contrary to popular belief. The absence of surplus cash in the timber industry has hindered the creation of new production facilities. The Devil's in the Details: Factors Influencing Profit These insights are derived from extensive surveys conducted amongst employees of the timber industry across various regions in Russia. Despite the general profitability boost, the average rate of return has been hovering around the standard 10-15%. Increased transportation costs have been a significant deterrent to profit growth. Hauling timber from the logging site to the production facility or sawmill has become 25-35% pricier on average, causing transportation expenses to account for over a third of the raw material costs. Last year's surge in timber prices was a global phenomenon. Demand for processed wood products skyrocketed both in Russia and worldwide, a surge that couldn't be matched by short-term production increases. This supply-demand mismatch naturally drove prices upwards. Industry Breakdown: Price Increases by Product Last year, the prices of specific timber products witnessed sharp increases. Coniferous sawn timber and wood and technological raw materials saw a 73% and 60% price rise, respectively, while coniferous boards became 33% more expensive. The uptick in product prices was accompanied by a similar rise in logging costs, due to escalated expenses for transportation, fuel, labor, and other necessities. So, what does the future hold for the timber industry? Only time will tell. But in the meantime, it’s crucial to remain informed, adaptive, and ready for change.

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