For nearly nine months, Australia has been struggling with a growing supply gap of building materials products, and now there is an unexpected "savior"-Russian timber processed in China.
There are currently thousands of projects under construction across Australia, mainly because of a shortage of laminated laminates (LVL). First popularized in Australia in the 1970s, the material is mainly used in house structures and its strength rivals that of solid wood, concrete and steel.
Now some of Australia's largest timber processors are retooling, switching roles and becoming net importers, filling the country's once-empty warehouses with a steady stream of Chinese wood products processed from Russian logs.
Australian timber importers are big customers of Russian timber, especially wood products and building materials. Together these imports supply between 40% and 50% of the Australian market for LVL, panels and beams.
There are hardly any other structural alternatives to LVL, and any plan to build a high-capacity LVL plant in Australia will face a lead time of at least three to five years before it is fully operational.
About 140,000 detached homes have been built in Australia in the past 12 months and this level of demand will continue for at least 18 months.
Russia is the fourth largest producer of cork in the world with an output of 40 million cubic meters. But only 10 million cubic meters was supplied to the country itself, so before the Russia-Ukraine conflict took its toll on the industry, Russia was the world's largest timber exporter at 28.5 million cubic meters.
But for Russians, there are many ways around this problem. Russia dodges the "conflict" timber ban imposed by many countries, including Australia, and hundreds of wooden trucks cross the Sino-Russian border into China every day, while China has no timber ban on the country.
Therefore, China converted Russian log processing into wood products, and its export volume to Australia hit a new high, seizing the LVL product market. It is expected that plywood of different sizes will also enter Australia through this channel.
In Australian warehouses, wood products from China have piled up like a mountain, even exceeding the market demand. In the near future, there may be discounts in the Australian wood products and building materials market.
Separately, the cost of building a new home in Australia has risen by 20 per cent due to material shortages, supply chain disruptions and increased demand for skilled craftsmen. Builders are bracing for more expensive timber products after the government imposed a 35% tariff on imports from Russia and Belarus.
But China is not affected by this tariff, so it has the opportunity to label Russian timber as "Made in China" and ship it to the global market.
The Australian contractors were very happy about this, and their thinking was "since these wood products have come to Australia, so come". If the wood fits the bill and appears to have compliance paperwork and stamps, they don't care where it comes from.
Australian builders, architects and designers rejoice.