Timber prices in China move upwards

Continued increases in demand for wood raw-material from sawmills, plywood plants and pulp mills in China has pushed domestic log prices upward and many Chinese companies are increasingly exploring the opportunities of importing more logs and wood chips to supplement the domestic fibre sources. The tight log supply has resulted in higher prices for domestically sourced logs this year.

Chinese fir sawlog prices were almost 17 percent higher in the 2Q/10 as compared to the same quarter in 2009, according to the Wood Resource Quarterly (WRQ). Eucalyptus logs, mainly used by the pulp industry, have also become more expensive the past 12 months, reaching new record-highs.

The continued high costs of locally sourced logs has resulted in higher volumes being imported so far this year. During the first eight months of 2010, the total imports of softwood and hardwood logs were up 23 percent compared to the same period in 2009. The importation of tropical hardwood logs has increased almost 50 percent, and Papua New Guinea has overtaken Russia as the major hardwood log supplier to the Chinese sawmilling and veneer industry.

During the first eight months of this year, imports of wood chips to China have more than doubled compared to last year, as reported in the WRQ. Pulp mills in China have increased their consumption of imported wood fibre dramatically in just two years. The total chip imports for 2010 are likely to be close to five times as much as in 2008. Vietnam is by far the largest supplier of chips followed by Indonesia and Thailand. The three countries together currently supply about 90% of all imported chips.

Wood Resources International LLC, www.woodprices.com

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