KUCHING: The European Union (EU)+UK (United Kingdom) imports of plywood in 2023 could fall below 3.1 million cubic metres (cu m), which is the previous record low reported during the global financial crises in 2009, judging from the shrinking imports in the first nine months of the year.
During the January-September 2023 period (9m2023), the total EU+UK plywood imports from outside the region plunged by 30 per cent to 2.67 million cu m from that of 9m2022. Imports of tropical plywood were down six per cent to 353,000 cu m while imports of temperate hardwood plywood dropped by 38 per cent to 1.31 million cu m and imports of softwood plywood were off 24 per cent to 1.01 million cu m.
“If imports remain weak in the fourth quarter, which seems likely, total EU+UK imports for the whole of 2023 could fall below 3.1 million cu m,” said International Tropical Timber Organisation (ITTO) Tropical Timber Market Report (December 1-15, 2023).
The report said for the first time ever in a 12-month period (July 1, 2021 to June 30, 2022), total EU+UK plywood imports from outside the region exceeded five million cu m. However, by the end of September 2023, the 12-month rolling total had fallen to just 3.3 million cu m.
“The recent extreme volatility in EU+UK plywood imports is due largely to geo-political issues, mainly relating to the Russia Federation, combined with the lingering effects of the COVID pandemic. EU+UK plywood imports from the Russian Federation were rising almost continuously between 2014 and 2019, encouraged by extreme weakness of the Russian ruble against the euro and other EU currencies.
“At that time, a sharp decline in confidence in the Russian economy following a collapse in oil prices and economic sanctions on Russia following the country’s annexation of Crimea had led Russian manufacturers to boost exports in search for hard currency.
“Most plywood that was imported into the EU+UK from Russia during the period comprised birch plywood, including thicker film-faced boards which competed directly with tropical products, and most was destined for Germany, the Baltic States, Poland, the UK and Netherlands,” said the ITTO report.
EU demand for plywood at that time was given added impetus by a design trend to use plywood as the sole manufacturing material in furniture and interior finishes, with faces and edges expressed, even unfinished, to reveal its structure and achieve an “industrial look”.
Birch was the favoured species in these applications. The report said the anticipated surge in plywood imports into Europe from alternative supply countries following the removal of Russian and Velorussian products from the market was less dramatic than expected. By far, the biggest gain in market share was made by temperate hardwood plywood from China.
There was also a surge in birch plywood imports into the EU from Kazakhstan, raising immediate concerns that some European importers were deliberately circumventing the sanctions by sourcing Russian birch plywood from thirds countries.
“For tropical hardwood suppliers, the report said EU plywood importers were rushing to buy Indonesian products in the second and third quarters of 2022 and Indonesian mills were being encouraged to ramp up production as much as possible for the EU market and to relaunch production of thicker film-faced boards.
“However, the ability of Indonesian mills to do this was constrained by lack of log supply and existing demand of their products in other markets.
By far, the biggest gains in EU imports of plywood faced with tropical plywood during 2022 were made by products from China and Gabon,” it added.
In 2023, EU+UK imports of tropical plywood have held up better than imports of temperate hardwood and softwood plywood. In 9m2023, EU+UK plywood imports of tropical plywood were down only six per cent at 353,000 cu m.
However, direct imports from the tropics fell 15 per cent to 244,000 cu m.
The relative stability in overall imports was mainly due to a 45 per cent increase to 94,000 cu m in shipments faced with tropical hardwood from China. Most Chinese product was destined for the UK and the rise this year in face represents a rebound to more normal levels after a sharp downturn in 2022 due to supply problems during the COVID lockdowns in China.
“Considering EU+UK plywood direct imports from tropical countries between January and September this year, Indonesia was down 7 per cent at 108,400 cu m, Gabon was down 15 per cent at 51,500 cu m, Malaysia was down 22 per cent at 35,100 cu m, Morocco was down 30 per cent at 11,600 cu m and Vietnam was down 50 per cent at 10,300 cu m. “However, imports of tropical hardwood plywood from Brazil increased 13 per cent to 16,000 cu m while imports from Paraguay increased 24 per cent to 5,900 cu m.”
Malaysia was the fourth biggest plywood supplier to EU+UK after Indonesia, China and Gabon.
On the 38 per cent decline in EU+UK imports of temperate hardwood plywood to 1.31 million in 9m2023,the report said the drop was because of zero shipment this year from Russia and Belaru, which supplied 591,000 cu m and 113,000 cu m respectively in 9m2022.
Imports of temperate hardwood plywood from China were also down by 20 per cent at 969,000 cu m while shipments from Ukraine dropped six months to 116,000 cu m in 9m2023. In 9m2023, EU+UK reported decline in imports of softwood plywood across the board from all major supply countries to 1.01 million cu m or down by 24 per cent from 9m2022.
Again, imports from Russia and Belarus were at zero this year against 65,000 cu m and 55,000 cu m respectively in 9m2022. Bigger declines in absolute import volumes were recorded for softwood plywood from Brazil (down 8 per cent to 769,000 cu m, Chile (down 29 per cent to 117,000 cu m) and China (down 58 per cent to 55,000 cu m). “A clearer indicator of the overall weakness of the EU+UK plywood market this year is that it took much longer than usual for the dutyfree softwood import quota — set this year at 482,648 cu m in the EU and 201,500 cu m in the UK — to be filled. The EU quota was only filled in July whereas the UK quota was filled in September.
“Meanwhile, the EU and UK sanctions on imports of Russian plywood have significant knockon effects for the global plywood market,” said ITTO. With Europe no longer buying Russian plywood, larger volumes are now being distributed in other parts of the world, particularly in the Middle East and North Africa, China and CIS countries, notably in South Asia. for the EU ch production boards.
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