China Wood Products Prices
1-15th Sep. 2004

Guangdong log imports  

In recent years imported timber has accounted for about half of the wood consumption in China and imports have been growing steadily. Last year the consumption of imported wood products in Guangdong accounted for around 20% of national consumption. It came as a surprise to analysts when data indicated that, for some categories of logs and for some sources of supply, imports of logs by industries in Guangdong province fell sharply in the first half of 2004.

According to statistics from China Customs, in the first half of 2004, consumers in Guangdong imported 747,000 cubic metres of logs, a year on year increase of 26.3%. However, logs into Guangdong are mainly categorised as "other not listed non-coniferous logs" (Classification code 4403 9990) and were 348 000 cubic metres valued at US$52.037 million, down by about 30% in volume and 24% in value.  

In addition log imports from New Zealand, Mozambique and Papua New Guinea were 59 000 cubic metres, 42 000 cubic metres and 29 000 cubic metres, falling 73%, 15% and 46% respectively. 

Malaysia is the major supplier of hardwood logs to users in Guangdong and accounted for some 59% of the provincial total imports in the first half of 2004. Other major suppliers are German, New Zealand, Australia, Mozambique and Papua New Guinea.  

In the first half of 2004 the Guangdong log consumption of imported logs as a percentage of the national total fell to 8.7% from 19.5% last year. 

Local experts think that the main reasons for sharp decrease of hardwood log imports through Guangdong port is because log exporting countries are reducing sales to protect the forest resource and to promote local industries. 

In addition the increasing costs of ocean shipping have pushed up landed prices so importers have seen margins shrink. 

Compounding the issue is the additional costs now being incurred for domestic transportation. New regulations for road and rail transportation, which have effectively reduced truck loads, have increased costs to traders.  

Furniture exports to grow 

Although seven companies, all in Guangdong province, accounting for some 40% of all US wooden bedroom furniture imports have to face anti-dumping penalties on exports to the US market China's furniture production and exports continued to increase at a faster pace in the first half of 2004.  

According to statistics from China Customs, the value of China furniture exports in the first half were US$4.93 billion, a year on year increase of 42%.  

The number of reported participating companies at the China International Furniture Exposition in Shanghai (September 15-18, 2004) is illustrative of the growth of the sector.  

The statistics from the exposition company indicate that there are more than 2 200 registered up to now (700 last year) there are groups from Brazil, Russia, India and Holland registered.  

The Director of China Furniture Association, Jia Qingwen, is on record as saying that growth of China's furniture exports in 2004 will not be adversely affected by the US anti-dumping tariffs.  

MDF Sector Restructured  

There have been some major developments in China's MDF industry recently. Many large scale medium and high density fiberboard production lines are in the pipeline or are being constructed.

The Shandong Dongying Zhenghe Wood Industry's production line, with an annual output of 160, 000 cubic metres was commissioned in June of 2004.  

Also, the Guangdong Asia Chuangjian (Heyuan) Group's production line (annual output of 200 000 cubic metres) along with the Jiangxi Fuzhou Daya Wood Industry's production line (annual output of 200 000 cubic metres) began production in July of 2004.  

New developments are underway at the Guangxi Wuzhou Sanwei Wood Industry's production line (annual output of 240 000 cubic metres) and the Guangxi Nanning Gaofeng Rongzhou's mill (annual output of 135 000 cubic metres). 

Amongst the top level MDF manufacturers there have been some changes.  Reports indicated that for the Plantation Timber Products Group (PTPG) Carter Holt Harvey has become the largest shareholder as of July of 2004.  

There have also been some changes in the supply of equipment with more second hand machinery being offered. Local analysts say that the demand for processing equipment is strong but at the moment, few companies offering second hand plant.  

Local analysts are now talking about a re-structuring in the MDF industry where production could be 4 million cubic metres annually. 

The same analysts say that the current round of re-structuring is a good thing for the sector which will promote the development of the MDF industry in China. They for-see that some enterprises with no raw material guarantee and small scale industries with old and low productivity technology will be eliminated.  

National standard for Log Inspection 

It has been reported that a revised national standard for Log Inspection has been recently introduced in China. This revision adopts ISO 4475-1989 "Coniferous and broadleaved tree sawlogs--Visible defects-Measurement" and OCT 2292-1988 "The Method for Marking, Classifying, Transporting, Measuring Checking And Accepting Logs".  

Changes have been made in terms of dimensional measurement and timber quality assessment.  

Illegal timber held  

The State Forestry Administration recently announced the occurrence and prosecution of national forest offenses in the first half of 2004.  

During this period, 21,000 forest offences were reported and investigated, a year on year fall of 5.8%. 20, 680 forest administration cases resulted in punishment (98.4% of the total forest offences).

Taicang port handling Russian timber  

After Zhangjiagang port, Taicang port, neighboring Shanghai, has become one the important ports in recent years. Taicang Port received 93 ships and handled around 400,000 cubic metres of logs in 2003. Taicang port handles mainly imports of Russian timber in contrast to Zhangjiagang which mainly handles imports from Africa and South East Asian timbers.  

According to statistics, in the first quarter of 2004 Taicang Port has received 27 ships loaded with Russian timber and handled 132 000 cubic metres of logs and valued at Yuan 7.61 million, a year on year increase of 57% in volume and 83% in value.

Guangzhou City Imported Timber Market  

Shanghai Furen Wholesale Market 

Hebei Shijiangzhuang Wholesale Market  

 Shandong De Zhou Timber market  

Tian Jin City Huan Bo Hai timber Market  

Abbreviations

LM        Loyale Merchant, a grade of log parcel	Cu.m         Cubic Metre
QS         Qualite Superieure	Koku         0.278 Cu.m or 120BF
CI          Choix Industriel	FFR            French Franc
CE         Choix Economique	SQ              Sawmill Quality
CS         Choix Supplimentaire	SSQ            Select Sawmill Quality
FOB      Free-on-Board	FAS            Sawnwood Grade First and
KD        Kiln Dry	Second
AD        Air Dry	WBP           Water and Boil Proof
Boule    A Log Sawn Through and Through	MR              Moisture Resistant
the boards from one log are bundled	pc         per piece
together	ea                each
BB/CC  Grade B faced and Grade C backed	MBF           1000 Board Feet
Plywood	MDF           Medium Density Fibreboard
BF         Board Foot	F.CFA         CFA Franc
Sq.Ft     Square Foot	Price has moved up or down