Source: The Star

The ongoing Russian-Ukraine conflict, which has led to Russia banning the export of wood and forest products to the West, could see buyers sourcing alternative suppliers from countries in this part of the region such as Vietnam, Indonesia and Malaysia, according to Hong Leong Investment Bank (HLIB) Research.

The research firm said that recent trade disputes have bode well for local players in the sector amid firm demand for furniture and wood-based products from countries including the United States.

“The US-China and US-Canada trade wars as well as the Russia-Ukraine conflict have exacerbated the global supply demand imbalances. To recap, China, Canada and Russia were ranked among the top five exporters of wood products worldwide in 2019,” it said in a report yesterday.

It pointed out that the US market share of imported wood products from China had plunged significantly from 31% to 12.3% in just two years after the US-China trade war began in 2018. The US housing market is a top importer of plywood, veneered panels and sim laminated wood in 2020, accounting for 17% of the market share.

Another factor boding well for the local panel board players is that raw material costs, which had gone up due to ongoing supply disruptions and labour shortage, are tapering off from the peak, according to the research house.

 

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