China Wood Products Prices

01-15th March 2007

China further expands trade surplus in forest products
The total trade value of China’s forest products rose 24% to $47.07 billion in 2006, according to Chinese customs statistics. The import value of these products rose 10% to $19.39 billion (of which $18.49 or 95.4% were wood products) while the export value rose 34% to $27.68 billion (of which $24.27 or 87.7% were wood products). China’s trade surplus of these products grew 171% to $8.29 billion.

China increases world timber trade dominance
The charts show that China mainly imports raw materials and exports finished wood products. The import value of primary products such as paper pulp, logs, paper and paperboard, waste paper and sawnwood accounted for 90% of the total import value of wood products. China is
the world’s largest importer of logs, waste paper and wood pulp and the second largest importer of paper and paperboard, after the USA. China accounts for about half of the world’s imports of waste paper. Meanwhile, China is the world’s largest exporter of wooden furniture (49% of global exports) and plywood (30% of world’s exports).

Russia remains China’s largest raw material supplier
Russia remained China’s largest log and sawnwood supplier, accounting for 68% (21.83 million m3) of total log and 19% (1.174 million m3) of sawnwood imports .

Prices for imported logs and sawnwood edge up
Average CIF prices for imported logs and sawnwood rose 40% to $146.6 per m3 and 9.4% to $298.9 per m3, respectively, in 2006. However, these prices changed according with origin (see charts).

The chart above shows that average CIF prices for imported logs grew at two-digit rates, with prices for tropical logs higher and growing at a faster rate than those for temperate logs. The sharp increase in prices for Myanmar logs (eg., teak, padauk and alder birch) is probably due to the ban on border trade between China and Myanmar since March 2006. The chart below shows
that average CIF prices for sawnwood rose comparatively less markedly. Prices for tropical sawnwood are higher than temperate products, except US sawnwood. Prices for Thai sawnwood grew faster while those for Canadian and Malaysian products declined in 2006.

China’s export markets highly concentrated
China’s forest products were mainly exported to the USA, Japan and EU in 2006. About 35% of the volume of Chinese wooden furniture was exported to the USA and 8.8% to Japan, while 26% of Chinese plywood was exported to the USA. Local analysts suggest diversifying export markets in order to reduce trade frictions with traditional markets and boost further export growth. Potential markets include the Middle East, Oceania and Russia.

Log import volume and prices surge in Jiangsu ports
Log imports through the ports in Jiangsu Province surged to 6.84 million m3 ($1.28 billion) in 2006, up 21% (up 33% in value) from 2005. The average log import price rose 10% to $186.9 per m3 in 2006, with the December average surging 20% to $226.8 per m3. Increasing log import prices are due to the continued unbalance between log supply and demand and growing focus on downstream processing in supplier countries.

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