China Reported as the World’s Largest Importer of Softwood Lumber and LogsApril 2nd, 2012 by DWM Magazine
Importation of softwood logs and lumber to China has increased continuously over the past 15 years, and in 2011 the country was the largest importer of softwood lumber and logs in the world, according to the Wood Resource Quarterly. Total import value equaled almost $8 billion last year, which was an increase of 57 percent from 2010, and up from only $70 million 15 years ago. Annual growth over the past five years has been almost 30 percent, and over the past 15 years, the CAGR has been as high as 36 percent, says the report.
According to Wood Resource Quarterly, imports of softwood lumber have increased faster than imports of softwood logs over the past few years, but log imports still constitute a higher share of the total import value of softwood products. The reports says that after having increased for seven consecutive quarters, the importation of softwood logs and lumber fell for the first time in the fourth quarter of 2011 because of reduced domestic demand and high inventories at many of the country’s ports. It adds that the decline was 14 percent from the third quarter of 2011, but the total import value was still higher than the fourth quarter in 2010.
By volume, importation of softwood log and softwood lumber to China fell 10 percent in the fourth quarter as compared to the previous quarter, says the report, adding that importation of logs and lumber from Russia decreased the most, while lumber from New Zealand and logs from Canada actually increased slightly during the fourth quarter.
Much of the increased import demand for softwood raw-material has been, and continues to be, driven by the fast expansion in the house construction sector combined with the fact that China lacks domestic forest resources to meet the growing demand for most forest products, according to the announcement. A tightening monetary policy with a restricted money supply resulted in reduced activities in the construction sector in the second half of 2011. It has also been reported that there were overstocked inventories of real estate (more than 20 months of unsold inventory in Beijing and Shanghai), and that housing transaction volumes in many big cities fell by more than 50 percent in the fourth quarter.
According to Wood Resource Quarterly, it can be expected that the housing market will continue to face headwinds during the first half of 2012 unless the Chinese government steps in to ease the country’s monetary policy. The report adds that as a consequence, the prospects for log and lumber imports will be faced with uncertainty short-term, but will likely continue to trend upward long-term.