China's Housing Market Deepens Cracks in Global timber Trade

China's housing market deepens cracks in global timber trade: softwood lumber imports fall, Russia strengthens dominance

    According to the National Bureau of Statistics of the People's Republic of China, March 2026 was marked by a new round of decline in the housing market: the volume of new construction decreased by 17% year-on-year, to 53 million m2. Real estate investments in the first quarter fell by 11.2% to 1.77 trillion yuan. The deep crisis in the construction sector has directly affected lumber imports: according to Chinese customs, in 2025, softwood lumber imports totaled 14.6 million m3, the third consecutive annual decline. At the same time, Russia's share exceeded 70% of all supplies, and 78%— including Belarus.

Construction sector: the numbers couldn't be worse

    The data released on Friday by the National Bureau of Statistics paints a picture of prolonged stagnation. Even taking into account the seasonal recovery after the Spring Holiday (sales are traditionally minimal in February), March figures remain deep in the "red zone".

Key indicators (March 2026 / I quarter 2026):

Long-term context:

•     Sales of commercial real estate since the beginning of the year (781 million m2) are 36% lower than the 5-year average (1.225 billion m2) and 46% lower than the 10-year average (1.459 billion m2).

The Economist magazine warned last month that China's real estate crisis could drag on until 2030. The share of new home sales in total real estate transactions has fallen from over 50% in 2022 to 26% in 2024 and continues to decline in 2025-2026. In its forecast for the first quarter of 2026, Morningstar states that demand recovery should not be expected until at least 2027.

Softwood lumber imports: third consecutive annual decline

    The decline in construction, the main consumer of lumber, had an immediate impact on import statistics.

According to Chinese customs:

•     - 2025: import of softwood lumber — 14.6 million m3 (decrease for the third year in a row).
•     - Pre-pandemic peaks: import volumes have halved.

    Russian suppliers turned out to be the main beneficiaries of the reformatting of the market (and at the same time suffer from falling demand):

•     - Russia's share: more than 70% of all volumes entering Chinese ports.
•     - Russia + Belarus together: they supply more than 78% of Chinese imports of softwood lumber.

    For comparison: A few years ago, Russia's share fluctuated at the level of 50-60%, while Europe and North America occupied significant shares. Sanctions, logistical collapse and the reorientation of suppliers have dramatically changed the trade map.

Key indicators of softwood lumber imports to China:

Impact on the Chinese market and global trade

For Chinese traders and processors:

1. - Price pressure: Oversupply from Russia and falling construction demand are pushing prices down. The marginality of import operations is compressed to critical values.
2. - Tougher competition: Against the background of the "buyer's market", Russian exporters are forced to offer discounts, which further reduces profitability.
3. - Product range shift: Demand is shifting towards the cheapest varieties and sizes. High-quality, but more expensive products (European, Canadian, Scandinavian) are almost completely replaced.

For international suppliers (Europe, Canada, New Zealand):

1. - Loss of a key market: China has been closed to them in the softwood lumber segment for years (if not forever). The dominance of Russia (and Belarus) has become a structural, not a temporary phenomenon.
2. - Search for alternatives: European and North American exporters are forced to refocus on the markets of the Middle East, Southeast Asia (Vietnam, Indonesia) and Africa, where competition is also high and effective demand is lower.

For Russian exporters (the paradox):

•     - On the one hand, the market share has grown to a historical maximum.
•     - On the other hand, demand is falling, prices are falling, and logistical costs are rising.
• Only the largest players with access to cheap logging and subsidized railway tariffs will survive.

Forecast for 2026-2027

• - Real estate market: Recovery is not expected until at least 2027. New construction will remain sluggish, while investments will decrease.
• - Lumber imports: Likely to decrease by another 10-15% in 2026 (unless massive government stimulus programs are implemented).
• - Russian dominance: It will increase. Supplies from Europe and North America to China will remain at a symbolic level.
• - What can change the picture: Only large-scale public infrastructure projects or an unexpected reversal in housing policy (for example, the massive purchase of unsold housing by the state). There are no such signals yet.
•  

Result

    The cracks in China's housing market have turned into deep fissures that have already changed the landscape of the global timber trade. China is no longer a bottomless market for everyone. Russia has won, but its exporters have also been trapped by falling demand and fierce price competition.

In the next two to three years, the softwood lumber market in China will be a survival market: the weak will leave, the strong (and cheap) will remain. Recovery is possible only if Chinese construction is revived, but it is not necessary to wait until 2027.

Tags: #China #housing market #lumber imports #coniferous forests #Russia #statistics #real estate #forecast