China Wood Products Prices

16-30th September 2005

US Dollar Exchange Rates of  23th September 2005

China Yuan 8.09
Report from China

China doubles the yuan’s trading range

China widened the yuan’s trading band against non‑dollar currencies in late September. The yuan trading range will increase against currencies such as the euro and the yen to plus or minus 3 %, a step toward China’s long term goal of a floating exchange rate. 

China stopped a decade-old peg to the US dollar in late July, revaluating the yuan by 2.1% against the US dollar and allowing it to fluctuate plus or minus 0.3% a day under a new managed float supervise by the People’s Bank of China, the central bank. 

Strong value added exports shrink deficit

China’s forest products trade has developed rapidly, with the total value exceeding US$30 billion in 2004 according to Mr. Chen Jiawen from the State Forestry Administration. The forest products trade deficit of China is dwindling as the country focuses on imports of resource products and exports of high value-added downstream and labour‑intensive products for which China enjoys comparative advantage. 

The value of forest products trade was US$32.3 billion in 2004, up 25% from 2003. Of the total, exports accounted for US$16 billion (up 34%), while imports accounted for US$16.34 billion (up 18%). The trade deficit of forest products in 2004 was US$346 million, a year on year decrease of over US$1.6 billion. 

Major imported products were logs (US$2.8 billion), sawnwood (US$1.4 billion), wood-based panel (US$890 million), wood pulp and waste paper (US$5.3 billion), paper and paper products (US$5 billion), edible fruits and nuts (US$619 million). Major exported products were furniture (US$5 billion), paper products (US$3.8 billion), small wood products (US$2.8 billion), wood-based panel (US$1.5 billion), sawnwood (US$219 million), rattan grass and reed products (US$1.1 billion), forest chemical products (US$350 million), edible fruits and nuts (US$917 million). 

Particleboard industry enjoys development

Zhang Senlin, Chairman of China Forest Products Industrial Association, said that China’s particleboard industry has stepped into a high‑speed development stage. That is thanks to the rapid development of China’s real estate, interior improvement and decoration, furniture and package industries. Around 400 million m² of China’s urban housing has been built per year in recent years (1‑1.2 billion m² per year if rural housing is included). 

However, the Chinese particleboard industry faces some challenges:

§   The domestic production lines of particleboard require imported equipment although some firms are manufacturing particleboard equipment in China.

§   Higher fuel prices are raising production costs.

§   The growth in real estate has slowed down. In the first half of 2005, the real estate sector grew 24%, down 5% from 2003. The real estate in the Yangtze River and Pearl River Deltas fell 6% from last year. 

Mr. Senlin indicated that the future of the particleboard industry will depend on innovative management and administration, building raw materials bases and establishing brands in the market. 

China is net exporter of wood-based panels

China is not only the largest wood-based panel producing country but also is rapidly consolidating as a net exporter of wood-based panels. In the first half of 2005, Chinese plywood exports reached 2.1 million m³ (US$670 million), which is 6.5 times (4.1 times in value) larger than the imports levels, respectively. Fiberboard exports were 482,700 tons (US$179.97 million) in the same period, up 504% (518% in value) from 2004. In contrast, fiberboard imports were 329,400 tons (US$12 million) in the same period, down 21% (14.3% in value) from 2004. 

Poplar plantations feed the panel industry

The expanding Chinese wood-based panel industry has mainly benefited from fast‑growing forests in the northern plains. Regarded as “plain areas with no forestry”, Jiangsu, Shandong and Hebei Provinces have made great strides in establishing fast growing poplar plantation bases in recent years. These provinces have undergone transition from traditional agriculture to modern forestry and from traditional grain production to timber utilization.  

This has broadened farmers’ income base from agriculture and livestock husbandry to forestry and timber processing activities. Shandong, Jiangsu and Hebei Provinces now account for the largest production of wood-based panel in China. The outputs of wood-based panels of these provinces totalled 10.13 million m³, 10.1 million m³ and 9.3 million m³ in 2004, accounting for 19%, 18.6% and 17% of the total national output (54.5 million m³), respectively. 

Diversification of plywood products China

China is diversifying the plywood products exported to Europe as export levels increase. Some producers are beginning to supply plywood made from Russian birch and Chinese poplar (birch as surface and back veneer, poplar as core). However, the exports levels of this product are insignificant due to high prices of imported birch. 

Guangzhou City Imported Timber Market

Shanghai Furen Wholesale Market

Hebei Shijiangzhuang Wholesale Market

Tian Jin City Huan Bo Hai timber Market

Shandong De Zhou 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