The importation of logs and lumber by China over the past two years fell dramatically, reaching 12-year lows in 2023 due to the weak economy
China’s economy has continued to disappoint the past year, with the GDP rising only 5% year-over-year in 2023. This would be a respectable growth in most countries, but it was well below its 20-year average of 9% for China.
All sectors, including manufacturing, house construction, and infrastructure, have been hit as domestic consumption has weakened and the government has tightened lending for large projects. The regional over-supply of housing has hit the forest products sector particularly hard, with reduced demand for building materials, millwork, and furniture.
In addition to lackluster spending by consumers domestically, reduced exports of consumer products and industrial equipment to countries in Europe, Southeast Asia and Oceania have also negatively impacted the consumption of wood materials in China.
The decline in forest product demand has dramatically decreased softwood logs and lumber imports in 2022 and 2023. The combined import volume of softwood roundwood and lumber (in roundwood equivalents) was 33% lower in 2023 than in 2021.
Although log and lumber imports to China increased in the 4Q/23 from the previous quarter, the estimated annual importation for 2023 was still the lowest in 12 years. Log importation has seen the most significant decline, while lumber imports have fallen relatively less in the past two years.
The most significant changes in trade have been the decline of logs from Europe and lumber from Russia, Canada, and Finland. Not only have import volumes plunged in the past few years, but so have prices for softwood logs and lumber sold into China. In the 4Q/23, the average lumber prices were $210/m 3, down from $270/m3 in the same quarter in 2021.
During the same period, the average log cost delivered to Chinese ports fell from just over $180/m3 to $130/m3.
The International Monetary Fund (IMF) predicts that the GDP growth in China will drop to 4.6% in 2024, and export markets in Europe, Southeast Asia, and Oceania will suffer another year of financial distress. Therefore, it is not likely that China’s demand for wood materials will recover from the decade low shipments that occurred in 2023 in the coming year.
Market Insights is a subscription service available in WoodMarket Prices, a global pricing and analytics platform from ResourceWise. The pricing data service, established in 1988, has subscribers in over 30 countries. WoodMarket Prices tracks prices for sawlog, pulpwood, lumber, and pellets and reports on trade and wood market developments in most key regions worldwide.
For more insights on the WoodMarket Prices platform, a unique and valuable tool for every organization that requires updates on the latest developments of global forest products markets, please visit www.resourcewise.com/platforms/woodmarket-prices.
Source: Wood Resources International
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