China: Analysis of current timber market prices fluctuations

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Many members of China’s timber associations have reported increases in timber prices are of concern as they impact production costs. The most serious price fluctuations have been for softwood logs, At present prices for hardwood logs are relatively stable.

The secretariat of the China Wood Protection Industry Association (CWPIA) undertook an analysis and this is summarised below.

The first cause of price increases is the pandemic. Demand for wood products in the United States, Canada and parts of Europe has increased. Raw material suppliers to China see an opportunity to raise prices on the back of growing demand.

Second is the impact of land and sea freight. The pandemic has had a significant impact on international trade. Port inspections and quarantine have become stricter and the flow of containers has been disrupted and shipping companies have raised container shipping costs.

The third is the impact of supply and demand. In 2020, China's timber imports totaled 108.02 million cubic metres, down about 5% year on year. The main suppliers of timber such as Russia, New Zealand and Canada saw demand fall. Stocks in supply countries and in China have fallen leading to a temporary imbalance between the supply and demand of timber which has pushed up prices.

The Association suggests that eventually the pandemic will gradually be controlled and production and exports will gradually recover in the main timber production countries.

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