China Wood Products Prices

16-31th August 2005

US Dollar Exchange Rates of  19th August 2005

China Yuan 8.10

Report  from China

Capital flowing into the Yangtze River Delta

Furniture has been an important manufacturing industry in the Yangtze River Delta after China’s entry to the WTO. The Yangtze River Delta has been increasingly attracting international investments due to five major advantages: low labour cost, high labour skills, adequate transport infrastructure, ample investment opportunities and large market size. 

In recent years, many Pearl River Delta’s furniture enterprises facing rising land costs and strong competition have been seeking development opportunities in the Yangtze River Delta. Taiwan P.O.C.’s Lacquer Craft Manufacturing Co, Ltd. (Asian largest furniture exporting enterprise), is an example. Based in Dalingshan, Guangdong Province since 1980, it ships around 1500 furniture containers to the USA and other countries every month. Lacquer Craft Manufacturing Co, Ltd., which recently acquired Universal Furniture (a major player in the US wooden furniture market), has now built a furniture industrial park in Jiashan, Zhejiang Province of around 1500 mu (1 ha equals 15 mu). 

The US GSLHF, a large furniture enterprise, is building a big furniture procurement centre in Haimen, Jiangsu Province. GSLHF has invested about US$ 2b to build a 20,000 mu international furniture commercial port. The total constructed area is about 10m m² and is expected to be completed in five years. The centre will involve a blend of functions including production, trade, logistics, research and development, and culture.

In addition, Guangming Group Furniture Co., Ltd. is planning to invest billions of yuan to build a 7,000 mu furniture industrial park. According to preliminary statistics, there are over 200 foreign furniture enterprises in Shanghai with a total investment of US$1b between 2001 and 2003 alone, doubling total investments in the 1990s. Among the foreign firms, there are ten US furniture enterprises, each investing tens of millions of US dollars in highly modern factories in Shanghai, including “Fine Design and Marketing Company” and “Lacquering Skill Company”. 

There are 16 cities in the Yangtze River Delta developing rapidly. It is one of the regions with the highest economic development level in China. It is expected that more furniture enterprises from USA, Germany, Italy, South Korea, Malaysia and Hong Kong, S.A.R. will continue to establish in China, mainly in the Yangtze River Delta, in the next few years. 

A S&T wood industry city being built

It has been reported that a science and technology wood industry city is being built in Pizhou City, Jiangsu Province financed by Wenzhou private entrepreneurs. The industrial city covers a 800 mu area with 650,000 m² constructed area and a total investment of 690m yuan. The project is divided into three phases and will be completed by the end of 2007. The industrial city will have a blend of functions such as product selling, meetings and exhibitions, international trade, e‑commerce, storage and logistics, scientific research and training, information service as well as areas for restaurants, hotels and entertainment. The aim of the project is to make it the first wood industry city in China and make Pizhou one of the largest international plywood procurement centres and China’s largest wood products distribution and information centre.  

A furniture materials trading centre being built

The production and export of furniture in Guangdong Province are mainly concentrated in three regions, namely Shenzhen, Dongguan and Shunde. The combined annual sales and export value are over 30b yuan and 10b yuan, respectively. 

An international furniture material trading centre is being built in Longjiang town, Shunde City with a total expected investment of 2b yuan and an area of 1000 mu of which 1m m² will be constructed areas. There will be exhibition centres, business buildings, international procurement centres, information centres, high class hotel, a post office, apartments as well as restaurants. Public biddings will begin in late 2005 and the Centre is expected to open in early 2006. 

Malaysians seeking cooperation in Guangdong

The Malaysian furniture procurement and investigation group came to Guangdong seeking partners for the production of furniture parts and wood-based panels. According to estimates from Guangdong General Chamber of Commerce, the cooperation could reach US$10m.  

According to statistics, 70b yuan of furniture were sold in Guangdong in 2004. Most of them were exported to the USA and EU markets. Guangdong has to find new export markets due to the anti-dumping measures being faced in the USA and EU. Malaysian representatives indicated that cooperation between the two sides will bring strong competitive advantages to the international furniture market by combining Malaysia’s rich wood resources and Guangdong’s high quality and inexpensive upholstery and other furniture parts.  

A 1.7m ha of eucalyptus plantation established

Eucalyptus has become a strategic species in the establishment of fast-growing and high yielding plantations in the southern areas of China. About 1.7m hectares of eucalyptus plantation have been established in Guangdong, Guangxi and Hainan for the paper, pulp, and fibre industries. Eucalyptus is widely used for pulp and paper, medium density fiberboard and furniture manufacturing as well as for wood chips for export. According to preliminary statistics, 540,000 farmers, private entrepreneurs and foreign businessmen are investing in the establishment of eucalyptus plantations in Guangdong Province. 

Dalian, a major furniture city in Northern China

Dalian is one of most vibrant cities in Northeast China with convenient land and sea transportation, pleasant climate and large industrial sector. Furniture has become its leading industry. The city has 550 furniture enterprises, 100,000 employees and 5b yuan of annual output value. The value of furniture exports reached US$560m to Japan, US$100m to the USA and US$50m to Europe in 2004. 

Dalian has several prominent furniture enterprises such as Huafeng, Longhua, Huaxia, Jingling and Juma. Huafeng’s furniture is particularly famous in China and exported mainly to Japan. Moreover, there are joint ventures that have been established in Dalian such as American DECC and some Japanese furniture companies. The city has 11 large size furniture markets with an area of 100,000 ha and annual sales of 3b yuan. 

Guangzhou City Imported Timber Market

Shanghai Furen Wholesale Market

Hebei Shijiangzhuang Wholesale Market

Tian Jin City Huan Bo Hai timber Market

Shandong De Zhou 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