The high exchange rate of the ruble and declining demand both in foreign markets and in Russia have a negative impact on the lumber sector. At the end of the year, their output may decrease by at least 2–4%, and only large technology companies will remain profitable.
The production of lumber from softwood may decline by at least 2–4% by the end of 2026, Strategy Partners calculated. Product output indicators will be influenced by the dynamics of residential construction in Russia and the level of demand in the key sales market – China.
As Valentin Gavrilov, director of the Strategy Partners practice, notes, given the high loan rates, in the base scenario the volume of construction will remain at the level of previous years, but the dynamics of the start of new projects will slow down. China is also experiencing stagnation in its real estate sector. Also, according to Mr. Gavrilov, the country is replacing coniferous lumber with hardwood lumber.
According to Rosstat, in 2025, lumber production in Russia decreased by 2.5%, to 28.5 million cubic meters. m. The WhatWood agency calculated that in the first four months of the year the drop was 4%. According to analysts, the reasons do not change: a strong ruble, weak demand in the world, contraction of sales markets, sanctions and a decrease in consumption in the domestic market.
The weakening of the ruble can support production volumes, says Mr. Gavrilov. As noted by Strategy Partners, the exchange rate of the national currency is a key factor determining the profitability of wood processing. According to analysts’ calculations, at the current rate, the strongest companies (with a focus on Japan, producing planed wood, and having the ability to utilize low-grade raw materials) may have a sales profit margin of 5–7% at the end of the year.
Companies with average business quality, depending on the region, will be able to break even, while weak ones will mainly sell lumber at an operating loss, believes Valentin Gavrilov.
According to him, if the rate exceeds 90 rubles/$, then the sales margin and EBITDA of the business may return to the more usual 10–15%, which will stabilize the financial situation.
Sales of softwood lumber to China in the first quarter of 2026, according to Strategy Partners, decreased by 26%, to 2.6 million cubic meters. m, while Canada and Belarus increased supplies to this market. Prices for pine sawlogs during this period fluctuated between 19.6–21.6 thousand rubles. for 1 cubic m on CFR terms (including freight) in Shanghai, for spruce lumber – in the range of 18.7–20.6 thousand rubles. for 1 cubic m.
According to Valentin Gavrilov, relatively high prices are associated with a reduction in supply from Russia and difficulties in logistics on the West Siberian Railway. With the normalization of supplies and the onset of summer, the Chinese market will be put under pressure by increased supply, which will lead to a decrease in quotations, the expert expects.
Due to the decline in Chinese demand, Russian suppliers are looking for new markets. Thus, Uzbekistan is becoming an important supply direction, but prices in this market are 15–25% lower.
In addition, the overloaded infrastructure in the eastern direction, as well as the low turnover of wagons, further limit the possibilities for increasing exports.
Vice President of Segezha Group Nikolai Ivanov emphasizes that the global lumber market is in a structural crisis. “In the Russian Federation, a decline in production of 10–15% year-on-year is consistently recorded, and this is not just a reaction to local or global conditions,” he says. In his opinion, at the end of the year, at best, we can expect a reduction in production by 5–7%, and small and medium-sized sawmills in the North-West and Siberia are threatened with closure.
According to Mr. Ivanov, the state and business need to switch to stimulating the production of ready-to-install house kits, CLT panels for wooden house construction, fuel pellets for the fuel and energy complex, wood chemical products, and fibers for the textile industry. This, according to him, requires the creation of modern biotechnological complexes, long-term cheap money, contracting for the construction of large residential complexes, and also, possibly, the localization of final export production in the territory of special economic or industrial zones of friendly states.
