Deep-dive study on the complex flow of logs and lumber
within China reveals that considerable volumes are being
‘re-exported’ to other regions from the first port of entry
New Report Highlights Many Dynamics in China’s
Government Policies and Wood Supply Chain
One of the main themes observed from the extensive field work carried out all over China is the increased and expanding role of Russian lumber in China. Significant and ongoing investments in a combination of modern sawmills, kilns and planers at Russian mills in Russia, Chinese mills in Russia, and Chinese mills on the Chinese side of the border have increased the value of lumber where it can be transported further in China. A growing number of Chinese distributors and processing companies are tapping into the expanding supply chain from Russia to access Russian spruce and red pine lumber. This is becoming more evident in the furniture sector as production improvements are made (at the expense of other exporters) to the quality and competitiveness of Russian spruce and pine lumber. As well, various Chinese government policies tend to favour Russian exporters over other suppliers to China.
China’s supply chain involves large (and often massive) distribution centres (land, ocean and river ports) near both major cities and emerging consuming regions (located mainly in inland China). The logs and lumber that enter China via ports take various traditional supply routes to be handled for consumption, processing or redistribution. A deep-dive was conducted on where all the logs and lumber go in China – both into traditional ports for consumption and onward to other processing locations, including the growing demand in inland regions of China.
Softwood logs and lumber in China have many diverse applications and tend to exhibit fluidity (based on prevailing demand and prices) across a variety of end-use segments. The flow of logs and lumber within China is therefore rather complex, resulting in some clear region-specific applications.
The detailed survey conducted reveals that considerable log and lumber volumes are still being re-exported to other regions from the first port of entry. A complication of the lumber trade in China is the huge volume of imported logs being processed into lumber at small local sawmills, where domestic sawn lumber (from imported logs) competes with imported lumber. In the report, the various end uses for logs and lumber are broken out by port/consuming region in such a way as to account for the main end uses, e.g., construction; furniture and related finished products; decoration/remanufacturing; treated lumber; packaging/industrial; and wood-frame house construction. These end uses are also forecasted out to 2025.
Over the forecast period, offshore lumber imports are forecast to continue expanding to offset the much slower growth expected in log imports and potential reductions in China’s sawmill capacity. Lumber imports from Russia via the One Belt & One Road are expected to expand to inland China while log and lumber imports from traditional supplying countries via ocean ports are expected to be more muted. Major log importers like New Zealand and major lumber importers like Canada could be at a disadvantage as various Chinese government policies tend to favour Russian supplies (and to a lesser extent, those from Europe).
The China Supply Chain Report provides a unique perspective on developments in the Chinese industry, market and supply chain – this is WOOD MARKETS’ fourth multi-client report on the China market since 2004. With Russia emerging as the dominant player, a detailed analysis is taken in the report to examine shifts in Russia; excerpts were provided in the September issue of WOOD Markets Monthly International Report. A full analysis profiling China’s wood imports and flows within China was also conducted, including regional details and end uses for logs and lumber in more than a dozen regions of China. In addition, the full report presents trends in exporters’ competitiveness, and outlooks for supply, demand and price trends to 2023/2025 for softwood logs and lumber.
China’s Import Demand for Softwood Logs and Lumber to 2023 • The Changing Supply Chain in China (with a Focus on Russia’s Industry / Export Potential) is now available. This fourth edition and 200-page report is available by subscription and a second summary of the report appears in the October issue of WOOD Markets Monthly International Report and the China Bulletin.