China Wood Products Prices

16-30th April 2005

Dollar Exchange Rates of 22th April 2005
China Yuan 8.28
Report from China

Foreign Trade Up 

Statistics from China's Customs show that in the first quarter of 2005 the countries international trade totalled US$295.2 billion, a year on year increase of 23%. Of the total, the value of exports rose 35% to US$155.89 billion and the value of imports grew about 12% to US$139.31 billion. The cumulative trade surplus for the first quarter amounted to US$16.58 billion. 

In the first quarter exports grew at a high rate and imports rebounded from a decline. The growth in exports was 42% while the growth of imports was only 3.8% but this was up on the previous quarter. 

Trade between China and its major trade partners grew overall. In the first quarter of 2005 the value of trade between China and European Union rose 26% to US$47.11 billion and European Union continued to keep its position as China's largest trading partner.  

The US is still China's second largest trade partner and the value of trade between China and the US grew 24% to US$43.62 billion. Japan ranked third and the value of trade with Japan rose 12% to US$41.24 billion. 

The statistics show that Guangdong. Jiangsu and Shanghai were the top 3 in terms of foreign trade value. In the first quarter of 2005 the total value of international trade of these provinces grew 15% to US$84.91 billion, making up 28.8% of the national total. Of the total, the value of exports rose 21.6% to US$45.5 billion and the value of imports rose 9% to US$39.41 billion.  

Electro-mechanical products dominated exports. In the first quarter of 2005 the export value of electro-mechanical products rose 34.4% to US$85.43 billion, making up 54.8% of the national total at the same period. 

Of the total, the export value of machinery and equipment rose 31% to US$32.21 billion. The export value of electrical appliances and electronics rose 30% to US$32.82 billion. The export value of new and high-tech products rose 32% to US$43.7 billion.  

Exports of traditional bulk commodities maintained a steady momentum of growth of which the export value of garments rose 16% to US$13.99 billion, textile yarn, fabrics and products rose 24.8% to US$8.41 billion, while the export of shoes rose around 23% to US$4.09 billion.  

Amongst imported commodities, imports of the primary products such as oil, coal and iron ore grew rapidly. Imports of industrial finished products such as automobile and steel fell significantly.  

The total value of imports in the first quarter grew 18.8% to US$30.94 billion of which the imports of coal rose 59% to US$5.4 million tons, iron ore imports grew 25% to 63.24 million tons and crude oil imports fell 1.7% to 29.64 million tons.

At the same time, imports of industrial finished products rose 10.4% to US$108.38 billion of which imports of electrical appliance and electronics grew 18.8% to US$35.52 billion, machinery and equipment rose 4.8% to US$21.52 billion, automobile imports fell 51% to 25 000 and imports also  fell 41% to 5.97 million tons. 

Timber trade exceeds US$ 30 Billion 

The State Forestry Administration, has reported that the total value of trade in forest products reached US$32.3 billion in 2004, a year on year increase of 24.8%, breaking through the US$30 billion mark for the first time. 

The values of both imports and exports increased from the previous year and exports rose dramatically so the trade deficit was reduced. The value of China's forest products exports was US$16 billion, a year on year increase of 34%. The value of imports amounted to US$16.34 billion, a year on year increase of 17.2% bringing the trade deficit of China's forest products trade to just US$346 million. 

For exports, wooden furniture continued to be the number one export item and the value of foreign currency earnings was US$4.724 billion, a year on year increase of 37.7%. Next was paper and paperboard, wooden products, plywood, and rattan, reed and grass products despite unfavorable international trading condition due to anti-dumping moves in some markets.  

In the trade in wood-based panels, exports of plywood rose sharply by more than 110% in volume and 152% in value. The growth in exports of fiberboard and particleboard also increased rapidly but the volumes were less than for plywood as these industries are still developing capacity.  

In terms of forest products imports, wood pulp, waste paper, paper and paper board, paper products still were the first largest imported items and imports grew almost 20% however the growth in plywood imports was only moderate. Fiberboard imports fell slightly in 2004 as local capacity grew but particleboard imports registered a small increase.  

For the first three months of 2005 China's trade in forest products continued to increase and the total combined value of imports and exports of major forest products reached US$ 4.8 billion, a year on year increase of 11.3%. Import rose 0.9% to US$2.47 billion and the value of exports grew 24.9% to US$2.33 billion. 

Russian timbers in Shandong  

In recent years Russian timbers have gained a bigger market share are are now used in large quantities, they sell well and prices are good in the Shandong market. For example, the price for a 4 metre length and 35 cm diameter high quality Scots Pine log is around Yuan 1000 per cubic metre.  

The higher quality (and consequently higher priced) Russian timber finds a ready market especially in the coastal or 'developed' regions such as Qingdao, Jinan and Yantai City. Local experts offer the following explanation for why Russian timbers sell so well:  

First, Shandong Province is one of more developed provinces in northern China. Many factors drive the demand for timber such as high industrial and agricultural production levels, consistently high construction rates, rapid urbanization which drives the real estate sector and service and recreational industries eg restaurants, hotel, offices and sports facilities. 

Secondly, local harvests from north eastern forests such as Korean pine, White pine and Larch which dominated the Shandong timber market in the past has been reduced dramatically due to the implementation of Natural Forest Protection Program. This has created a large gap between supply and demand in Shandong. Russian timbers are similar to the timber found in China's north east but are said to be of better quality and prices are reasonable. 

Finally, it is both convenient and economical to secure Russian timbers because of the developed ports, railways and roads feeding the main inland timber distributing centres. 

Local experts are convinced that Russian timbers will  continue to be the mainstay of further development of the province's timber processing industry. 

Composite Floors Consumption 

China now has 30 high-tech production lines for solid composite floor production and the annual production capacity is around 25 million square metres. This apparently represents some 30% of global production capacity and has been built up over the past ten years.  

China's domestic market  for solid composite floors is booming is one of the largest markets for solid composite floor consumption in the world. China's annual consumption of solid composite floors has reached around 25 million square metres at present taking up all domestic production. The annual growth in consumption of three layer solid composite floors has soared to 40% in each of the past three years. 

Per Capita GDP in Yangtze River Delta 

According to China's Statistics Bureau, per capita GDP in the Yangtze River Delta reached Yuan 35 147, around US$4247 calculated at current exchange rates. According to the World Bank's development report, per capita GDP of around US$3000 is considered the threshold of modernization.  

Analysts say that these statistics indicate that the Yangtze River Region has reached the development level of middle a class income country. Statistics show that the Yangtze River Region had realized Yuan 2877.5 billion in output, making up 21.1% of the national total in 2004 (20.4% in 2003).  

The average growth rate of the economy in the Yangtze River Region is in the region of 15-16% which is six percent higher than that of the national total. Not surprisingly the Yangtze River Region has become one of the most important regions driving national economic growth.

 The Yangtze River Region includes Shanghai City, 8 cities of Jiangsu Province and 7 cities of Zhejiang Province. Shanghai's GDP topped Yuan 700 billion in 2004, the GDP of Suzhou, Hangzhou. Wuxi and Ningbo City exceeded Yuan 200 billion and Nanjing's GDP was also near to Yuan 200 billion.  

First Woodlot Trading Market  

First woodlot trading market in the Inner Mongolia Autonomous Region, named the Tong Liao City Living Tree Trading Market Center began operating on March 25, 2005. Living tree trading is actually the term for trading in small forest plots and woodlots.  

Owners can trade their forest lands and trees as long as they have proven tenure rights. The opening of this market for woodlots in Inner Mongolia Autonomous Region has changed the way in which forest resources are utilised. 

Guangzhou City Imported Timber Market

Shanghai Furen Wholesale Market 

Hebei Shijiangzhuang Wholesale Market  

Shandong De Zhou Timber market

Tian Jin City Huan Bo Hai timber Market  

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