Continued increases in demand for wood raw-material from sawmills,
plywood plants and pulp mills in China has pushed domestic log prices upward and many
Chinese companies are increasingly exploring the opportunities of importing more logs
and wood chips to supplement the domestic fiber sources.
The tight log supply has resulted in higher prices for domestically sourced logs this year.
Chinese fir sawlogs prices were almost 17 percent higher in the 2Q/10 as compared to the
same quarter in 2009, according to the Wood Resource Quarterly (WRQ). Eucalyptus
logs, mainly used by the pulp industry, have also become more expensive the past 12
months, reaching new record-highs.
The continued high costs of locally sourced logs has resulted in higher volumes being
imported so far this year. During the first eight months of 2010, the total imports of
softwood and hardwood logs were up 23 percent compared to the same period in 2009.
The importation of tropical hardwood logs has increased almost 50 percent, and Papua
New Guinea has overtaken Russia as the major hardwood log supplier to the Chinese
sawmilling and veneer industry.
After Russia introduced a log export tax of 25% of the log value in 2008, shipments to
China fell from a record 25 million m3 in 2007 to less than 15 million m3 this year.
Unless Russia reduces their log tariffs, it is difficult to see importation expanding
between the two countries. Instead New Zealand, Australia, the US, Canada, Papua New
Guinea, Salomon Island and a number of African countries will all continue to benefit
from the Chinese forest industry’s diversification of their log sourcing.
During the first eight months of this year, imports of wood chips to China have more than
doubled compared to last year, as reported in the WRQ. Pulp mills in China have
increased their consumption of imported wood fiber dramatically in just two years. The
total chip imports for 2010 are likely to be close to five times as much as in 2008.
Vietnam is by far the largest supplier of chips followed by Indonesia and Thailand. The
three countries together currently supply about 90% of all imported chips.
Shipments of wood raw-material to feed the growing Chinese forest industry have
increased dramatically the past ten years and because of the limited supply of domestic
timber resources, this trend it is likely to continue in the coming years.