China Wood Products Prices
1-15th August 2004

Dollar Exchange Rates of 8th August 2004
China Yuan 8.28
Report from China    

Imports up slightly  

According to the latest statistics from China's Customs, in the first half of 2004 log imports were 13.053 million cubic metres valued at US$1.372 billion, a year on year increase of 1.6% in volume and 11.6% in value. However tropical log imports fell slightly to 3.809 million cubic metres from 4.164 million cubic metres, down by 8.5% compared with the same period last year.  

Sawnwood imports in the first half amounted to 3.078 million cubic metres valued at US$670.1 million, a year on year increase of 11.9% in volume and 15.5% in value. Of the total, tropical sawnwood imports increased to 1.504 million cubic metres from 1.423 million cubic metres, up by 5.7%. In the meantime, both plywood and veneer imports continued to decline. Plywood imports fell to 380 100 cubic metres from 430,400 cubic metres, down by 11.7% while veneer imports fell to 56,400 cubic metres from 90 500 cubic metres, a fall of 38%.  

Opportunities for timber trade from Beijing Olympics 

Olympics projects involve a wide range of activities including sports arena construction, hospital construction and hotel construction projects. According to a report from of  Xiong Wei of the Beijing Sport Stadium Association some of the major projects will be as follows:  

Sport construction projects 

There are 62 sports arena construction projects related to the Beijing Olympics.  

Of the total, there will be 17 new construction projects (including sports stadiums, sport venues, swimming centres, the Olympic village and the expo centre). These projects, it is estimated, will require some 70,000 square metres of wooden floors and 50,000 wooden doors.

In addition to the new sites there are 45 major renovation construction projects (including 20 sport venues) which will need a further 70, 000 square metres of wooden floor and some 60,000 wooden doors.  

Hospital renovation projects  

Hospitals are also being renovated. 10 hospitals are to serve the 2008 Olympics, including the well known hospitals such as the Xiehe, Tiantan, Youyi, Beijing Sino-Japan Friendship hospital and the Jishuitan hospital and again the estimates for demand for flooring and doors are a massive; 190,000 square metres and for doors some 6,200 units.  

Hotel renovation projects 

Plans indicate that 67 graded hotels will be renovated (31,000 rooms in all) and estimates for flooring demand are in the region of 5 million square metres and for doors 31,000 wooden doors. 

As noted by Xiong Wei, the estimates of demand are only preliminary and will be refined in time. 

The extra demand for furniture and interior products will add to the over-all demand for wood products as preparations for the 2008 Olympics proceed  

Goods description 

It has been reported that a trades description standard will be introduced soon and the Chinese Timber Economy and Development Center of the Department of Commerce have reportedly prepared a draft.  The new regulations have been examined and apparently approved by ministry experts. 

The proposed standard prescribes the accurate description of commercial timber and wood products. Timber and wood products (including logs, sawnwood, wood-based panels, semi-finished products and finished products made of wooden materials) will have to be labeled regarding species, trade name, trade mark, specification, grade, production sector (factory or farm), production date, moisture content and processing method. There will be quality inspection requirements and indications for storage, transportation and safe disposal where necessary.  

The regulations are aimed at safeguarding producers and consumers and to promote enterprise awareness of product quality. Through these measures it is hoped that the quality of commercial timber products will be improved and that international trade will be further stimulated. 

Wood chip exports fall again  

Wood chip export has been one of China's main earners and at present there are more than 100 manufacturing enterprises exporting wood chips to more than 10 countries.  

China began exporting wood chips in the 1980s and the business reached a peak in the 1990s. China exported 1.5 million tons of wood chips and valued at US$160 million in 1995 but since then wood chip exports slowed year after year and have fallen to less than 1 million tons in the last two years. In 2003 China only exported 960 000 tons of wood chips a year on year fall of 36%. 

The main reasons for the decline in wood chip exports was the implementation of the Natural Forest Protection Program when logging was reduced and raw materials for producing wood chips became scarce.  

Also China's paper making industry has developed rapidly in recent years so more chips are used domestically. China has more than 20 larger scale wood pulp and paper making enterprises including the Shandong Rizhao Paper Making Factory, Hainan Jinguang Paper Pulp Factory and Zhanjiang Paper Making Factory.  

Competition between chip plants and domestic panel producers also affected chip production. 

The booming wood-based panel industry required a large volume of wood and could pay better prices than the chip mills.  

Local experts predict that China will become a net wood chip importer in 3 to 5 years.  

Impact of NFPP 

Since the implementation of Natural Forest Protection Program (NFPP) China has reduced its national harvest by around 320 million cubic metres according to latest reports and there has been a significant improvement in forest cover.  

Forest cover in the Northeast and Inner Mongolia has reportedly reached 77%, up by 5.6% according to the of the fifth nation-wide forest resource inventory. The NFPP has apparently achieved good results, however, some problems and difficulties still exist in terms of stability of the forest resource in some areas, the ecological stability and the sustainable development of people dependent on the forest.  

It has been noted that while forest cover has improved the ecological state of some forests requires attention especially in some important ecological locations.  

Planned timber production in the northeast and Inner Mongolia is still high and above the 5 mil. cubic metres that is considered locally as a sustainable level.  Timber production will apparently be above 10 million cubic metres.  

Another issue is that long-term development goal has not yet been achieved and in the meantime the issues are problems of under-employment of forestry workers in the forest regions and slow returns from development programmes because of the lack of alternative development options in the forest regions. 

Local analysts say that development policies have not been fully implemented and that there has been a problem in securing the matching funds from local authorities so that projects could be fully implemented.  

Imports from Peru 

According to a report on Peru's exports, China is now a major market for Peruvian timber. In the first fourth months of 2004 Peru's timber exports to China grew by about 44% compared with the same period last year. According the report, the quoted prices for Peruvian timber exports were around 20% lower than those of Brazilian timber exports giving a distinct advantage.  

Peruvian timber exports have apparently been increasing at around 25% per year over the past 5 years. In the first fourth months of 2004 Peruvian timber exports have increased by 19% compared with the same period last year.  

Beijing's housing needs 

According to analysts and estimates from the Beijing Development and Reform Commission, the rapid development of Beijing real estate will keep be sustained for some time to come.

Investigations have apparently suggested that an 80-100 square metre house is more economical and practical in Beijing.  

Beijing will have a population of around 9.3 million by 2010 and to meet the housing needs of the growing urban populations the city will require 20 million square metres of housing which translates into a demand for some 200,000 houses units annually between 2004 and 2010.  

Guangzhou City Imported Timber Market 

Shanghai Furen Wholesale Market 

Hebei Shijiangzhuang Wholesale Market  

Tian Jin City Huan Bo Hai timber Market