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China Wood Products Prices

1 C 15th March 2015

US Dollar Exchange Rates of  12th March 2015
China Yuan 6.

Report from China 


 Land purchases for real estate development fall

Investment in real estate development in the first two
months of 2015 increased just over 10 percent year-onyear
but February investment levels continued the
downward trend. Investment in residential buildings was
up by 9.1 percent year on year but looking ahead a
correction is expected as the area of land purchased by real
estate developers fell over 30% in January.


PMI edged up in February
In February China's manufacturing purchasing managers
index (PMI) was 49.9% percent, 0.1 percentage point
higher over the previous month but still in negative
territory. A PMI reading above 50 indicates an expansion
in factory output while a reading below that indicates

The PMI of large-sized enterprises was 50.4 up slightly
month on month while that of medium-sized was 49.4
percent, down half a point and that of small-sized
enterprises was 48.1 an improvement month-on-month but
below the positive threshold.

Analysts point out that figures for January and February
are often volatile because of the effects of the Lunar New
Year holidays.


Strategy for timber reserves unfolds
The State Forestry Administration (SFA) has reported that
it will begin work on establishing strategic forest reserves
this year. The aim is to establish an additional 14 million
hectares of national forests by 2020.

The concept of strategic forest reserves was piloted in 15
provinces but will now be expanded nationally. The
central government will provide a RMB300 per mu
subsidy for „common forests‟ and RMB500 per mu
subsidy for „rare forests‟. (10 mu = approx. 0.7 ha.)

„Common‟ forests include fast growing tree species such
as poplar and eucalyptus for example while „rare‟ forests
include high value redwood species for example.

There is a strong demand in China for large diameter logs
and at present these are sourced from the domestic natural
forests or imports but with the logging restrictions in
China‟s natural forests and with overseas suppliers scaling
back harvests in natural forests, especially in the tropics,
there will be a huge gap in between Chinese demand for
timber and supply.

The SFA notes that 86 countries have introduced policies
to restrict or prohibit export of high value and rare timbers
which are in demand in China and it is this that has
prompted the SFA to consider the establishment of
strategic forests.

Right to approve timber production withdrawn from
some regions

A decision by the State Council on administrative
approvals has withdrawn the right to approve timber
production licenses from the administrations in Northeast
China and Inner Mongolia Autonomous Region.

In another development the SFA has decentralised the
approval processes for the issuance of timber transport
license and timber processing projects in state forest to
provincial authorities.

New pollution emission standards in furniture

A volatile organic compound emission standard for
furniture manufacturers in Jiangsu Province is being
formulated and when implemented enterprises will be
punished if their emissions exceed the maximum upper
limit in the standard.

In addition, coatings used by furniture manufacturers now
fall under the emission standard. The new emission
standard coming into force this year specifies that
furniture manufacturers should use only water-based
coatings with a low VOC content.

National wood processing and trade demonstration

The state-owned Assets Supervision and Administration
Commission in Dalian City, Liaoning Province has
announced that a national wood processing and trade
demonstration zone will be built at Changxing Island Port.
The construction of a timber fumigation plant was
approved in November 2014 making Changxing Island
Port the first in Northern China and only the third port in
China to have a timber fumigation capacity.

There are more than 4,500 timber processing enterprises in
Liaoning Province and around 6 million cubic metres of
timber is consumed annually. The new imported timber
processing and trade demonstration zone will be built to
meet the needs of the industries in the area.

The area of the timber processing and trade demonstration
zone will be 2.5 million square metres, is expected to cost
RMB3.9 billion and will feature logistics, production,
processing and distribution. On completion it is estimated
that the total trade value will be more than RMB10 billion
and around 15,000 employees will be required generating
huge economic and social benefits.

In the 16-28 February report we have been advised that the text
should read:
Commercial logging in natural forests is to be phased out
- the final stage will be the cessation of commercial
harvesting in all natural forests will be by the end of


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

Source:ITTO'  Tropical Timber Market Report

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