China Wood Products Prices

16-31th October 2005

US Dollar Exchange Rates of  21th October 2005

China Yuan 8.09
Report from China

 China’s foreign trade topped US$1 trillion 

According to China Customs, China's import and export value in the first nine months of 2005 reached US$1.02 trillion, up 24% over the same period last year. Exports rose 31% to US$546.42 billion while imports grew 16% to US$478.1 billion. 

The EU, USA and Japan were China’s main trade partners. Hong Kong S.A.R and ASEAN countries are China’s fourth and fifth largest trade partners. Guangdong, Jiangsu and Shanghai were the largest contributors to China’s total foreign trade in the period under review. Trade from and to these cities rose 19%, 36% and 16% to US$300.8 billion, US$165.1 billion and US$136.4 billion, respectively. 

The Department of Foreign Trade of the Ministry of Commerce forecast that China’s foreign trade will continue growing 22-25% annually and reach US$1.4 trillion billion by the end of 2005. Of the total, exports are expected to increase 30% to US$750 billion and imports will rise 18% to US$660 billion, resulting in a US$90-100 billion surplus, a historic high. 

Trends on Shanghai’s timber market

The Yangtze River Delta is a fast developing economy in China with Shanghai being China’s leading economic development centre. In recent years, the demand for timber in Shanghai has grown rapidly due to expanding urban construction boosted by the building of large facilities for the 2010 World Exposition. Currently, the Shanghai’s timber market can be described as follows:

·   Demand for timber has been flourishing, driven by real estate and the wood processing sectors. Total annual timber demand amounts to about 6 million m³ in Shanghai. Of the total, 3 million m³ are meant for the construction materials and interior decoration sectors, 2 million m³ for the floors and furniture manufacturing sectors and 1 million m³ for construction form boards, pianos and artworks. The annual consumption of timber in Shanghai amounts to 2.4 million m³ mainly in interior improvement and decoration, infrastructural construction and furniture sectors.

·   Sawnwood imports are larger than log imports and the range of imported sawnwood species has widened to dozens;

·   The proportion of hardwood timber imports is higher than pine timber imports. The national proportion of hardwood and softwood logs is 35:65 but in Shanghai the ratio is 85:35.

·   The prices of imported timber in Shanghai are 36% higher than the national average level;

·   Timber import sources tend to be more diversified. Until recent years, Shanghai imported softwoods from North America and hardwoods from Southeast Asia. Currently, Shanghai also imports hardwoods from North America (e.g., cherry, oak and maple), Africa (e.g., sapelli and rosewood), South America and PNG. Softwood imports come mainly from New Zealand and Russia while softwood imports from North America is minimal. 

Anticipated changes in the timber market

Local market analysts in Shanghai foresee the following changes in future:

·   The increase in log imports will slow while imports of semi-processed products will rise.

·   The proportion of medium and high grade hardwood will further expand. Timber import sources will continue to widen.

·   The demand for raw materials for plywood production will grow further.

Measures to address raw material shortage

Timber demand in Shanghai and the Yangtze River Delta region is huge and depends largely on imports. The Shanghai wood industry is, therefore, facing the growing shortage of raw materials. In addressing this problem, local experts think that the following measures should be taken:

·   Further develop an export-oriented economy;

·   Implement industry integration both between different enterprises and between upstream and downstream enterprises;

·   Implement brand strategies;

·   Shift from extensive management to intensive management. 

Sharp rise in imports through Yangzhou Port

According to the Yangzhou Inspection and Quarantine Bureau, in the first quarter of 2005 296,600 m³ of imported timber valued at US$49 million were inspected and quarantined in the Yangzhou Port. These figures were 59% in volume and 63% in value higher compared with the same period last year. According to local experts, the main reasons for these increases were:

·   rapid economic development of neighbouring Jiangsu, Zhejiang, Shanghai and Shandong Provinces;

·   the increasing demand for timber in Jiangsu and Shandong Provinces due to expanding exports of wood products;

·   adequate transportation, sanitary and traffic conditions as well as efficient inspection and customs clearance procedures, making Yangzhou Port one of the leading timber distribution and processing centres. 

Brazil and China sign pact on forestry

The Brazilian Environment Minister, Marina Silva, visited China on 12‑15 October at the invitation of the Administrator of the State Forestry Administration (SFA). Ms. Silva and Mr. Jiang Zehui, President of the Chinese Academy of Forestry, signed a cooperation agreement on forestry and biodiversity protection. 

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