Over the past decade, China’s fast expanding economy and boom in housing lifted the country to being the world’s largest importer of sawlogs and the second largest importer of softwood lumber after the U.S. Source: Troy Media www.troymedia.com
China has increased the importation of logs and lumber practically every year for over 10 years, with lumber imports in 2011 being 15 times higher than in 2001 and log imports being up three-fold from 10 years ago.
The total value of imported logs and lumber increased from $630 million in 2001 to almost $8 billion last year. This constant upward trend in importation came to a halt in late 2011 when construction activities slowed and inventories of logs and lumber at many Chinese ports reached very high levels.
As a result of lower demand for wood products, softwood log import volumes during the first three months of 2012 were down 11 per cent from the same period last year.
Log shipments from the two largest supplying countries, Russia and New Zealand have declined by 16 per cent and 17 per cent respectively from a year ago.
However, not all log suppliers to China have been hit by the reduced log demand in the country. Both Canada and the US have increased exports dramatically the past few years, and this trend continued into the first quarter of 2012, when exports from Western Canada were up 23 per cent from 1Q/11 and the U.S. shipments were two per cent higher than in early 2011.
North American log exporters have gained considerable market share since 2009. In 2011 it made up 22 per cent of all imported logs to the country.
Softwood lumber imports have shown a similar trend to that of logs. In 1Q/12, North American softwood lumber accounted for as much as 55 per cent of all imports up from only 25 per cent in 2007.
China is likely to continue to rely heavily on North America particularly for lumber but increasingly for logs over the next few years. When the US housing market, and as a consequence, lumber demand, eventually improve, available wood supply will tighten and costs for logs and lumber are likely to go up. This scenario may change how China sources logs and lumber in the future.
