China :Sawnwood Imports Rise
¡¾2002.12.27¡¿

This year sawnwood imports have soared again. During the first eight months of 2002 imports of sawnwood came to 3.4993 million cubic metres valued at US$ 763.0612 million, a year-on-year increase of 39.8% in volume and and 23.6% in value.

Local analysts think that the main reasons for rapid growth in sawnwood imports are as follows:

The growth in investments in capital construction, building and interior remodelling and decoration and in furniture increased. Because of this the demand for sawnwood in China enjoyed a strong growth.

During the first three quarters of 2002, of all imported sawnwood it was the growth of coniferous timber imports that was the strongest with a year-on-year increase of 95%. The growth of hardwood sawnwood imports was relatively stable with a year-on-year increase of around 30%.

The strength of softwood lumber imports was driven by demand from the construction sector and here the demand is still growing. China is short of domestic large diametre, good quality coniferous timbers such as Korean pine, White pine, Larch and Masson pine so imports naturally increased. Hardwood timber is used mainly in furniture making, interior joinery for decorative purposes and in these enduse sectors demand is strong. The annual value of the household decorative market in China is put at more than yuan 300 billion and this drives hardwood timber imports.

In the international market place suppliers from countries such as Russia, New Zealand and Canada are very actively pursuing the potentiality of China's sawnwood market. Russia, especially, has shown that it wants to increase exports of sawnwood to China. During the first three quarters of 2002 the growth of China's sawnwood imports from Russia was more than 125%. New Zealand, Canada, America, Southeast Asian countries such as Thailand and Myanmar also strive to export sawnwood to China.

Imported Timber Through Shanghai Port

As the main distribution centre for China's imported timber Shanghai Port handles large quantities and a wide variety of imported timbers. In recent times there have been some changes the trade in wood products through Shanghai.

First, the composition of timber imports has changed. The proportion of coniferous log imports has declined in favor of imports of hardwoods. In the first half of 2002 log imports of through Shanghai Port amounted to 600 000 cubic metres and most of this was hardwoods. Coniferous log imports accounted for just 90 000 cubic metres. This low level of coniferous log imports is a contrast to the rest of the country where coniferous log imports are increasing. The main reasons for this difference say local analysts are as follows:

Coniferous timber is mainly used in civil construction works and most of these projects are implemented inland and in the western regions. Demand for civil construction timbers in Shanghai has been showing a decline

In recent years the policy of substituting timber has been a success and it is now popular to replace timber with steel and plastic products.

The real estate sector in Shanghai and even in Eastern China has developed rapidly so the demand for joinery and decorative timbers is increasing. This is driving up hardwood imports.

Nationally the increase in imports of coniferous timbers, mainly Russian timber, has been mainly in Northeast China where the implementation of Natural Forest Protection Program has reduced harvests. In Shanghai and even Eastern China there is limited demand for this kind of timber.

Another interesting feature of Shanghai imports is that imports of sawnwood now exceed the imports of logs and sheer variety of types of timbers has grown tremendously. Imported sawnwood items now include flooring, semi-finished products such as door frames. The unit price of sawnwood through Shanghai Port is 40% higher than the national level.

The final noticeable change in imports has been the transition from bulk shipments to container shipments. In terms of total volume, imported timber in containers accounts for 70% of imports. Also the packaging of imported timber now tends to be of high quality which illustrates how importers in Shanghai and Eastern China's are maturing.

Xinjiang's Alashankou Port Business

By the end of October 2002 imported timber entering China through Xinjiang's Alashakou Port totaled a modest 126,400 cubic metres, up by a massive 185% over the same period in 2001.

There are several reasons for the more than doubling of cargo through the port. The Port Authority has actively pursued a policy to foster and take advantage of the growing domestic demand.

By providing a "whole-process" service for processing and establishing cargo handling enterprises and the city has created a good investment environment for the development of enterprises and this has drawn big companies such as Meike Company to invest and build factories close to the Port. In addition the local authorities have actively worked to attract government money and to encourage individual private owners to set up processing enterprises.

The other main factor driving up timber cargo growth is that the domestic market is strong and as such imported logs and sawnwood have a stronger price advantage. It is said that Xinjiang's Alashankou port could become the biggest timber distribution centre in Northeast China.

Sino-Finnish Cooperation

It has been reported that the Chinese Academy of Forestry has signed an agreement with UPM-kymmene of Finland to conduct cooperative on research on China's forest product markets. According to the agreement, the two agencies will cooperate to establish a research centre for China's forest product market and to investigate and study China's forest product demand and trade, establish a data base and publish the research.