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TheChina LumberMarket

China wood products trade briefs

China Lumber Trade Opportunities:

- Housing and construction market: Fuelled by rising urbanization, China is the world’s largest construction industry, with over 20 million people needing new residences each year. In 2008, the gross value of China’s construction was worth 62.04 trillion renmibi. (As of the end of July, 10 Chinese Yuan Renmibi equalled CDN $1.47).

It is home to half of the new buildings built around the globe each year, adding approximately 1.6 to 2 billion m2 of floor space annually. Of this, 32 per cent is urban housing and 44 per cent is rural housing. New housing is expected to hold a growth rate of 10 to 15 per cent to the end of 2011.

From 2001 to 2008, China’s gross value of construction (excluding state owned and collective owned) grew by 303.84 per cent rising from15.36 trillion renmibi in 2001 to 62.04 trillion renmibi in 2008. In 2008, the government spent a total of 18.19 billion renmibi on expenditures to develop low-income housing, up 114.3 per cent over the previous year.
4 Home remodelling: The push to renovate what was formerly state housing (now privately owned) and the sale of new homes as unfinished (with bare concrete walls) are driving the repair and remodeling sector. There appears to be continuing opportunities for wood partition walls and the use of wood furring in the home decoration trade to enable fitting out of finished surfaces.

- Government policies: China’s new policies, focused on improving energy efficiency and environmental impact of structures, make wood building systems an increasingly attractive option, with benefits such as carbon reduction and seismic stability.

- By increasing its imports of wood in various forms and its exports of finished products, China will continue to have a substantial impact on global trade in wood products, both as a customer for wood, and as a competitor producing finished wood and paper products. By 2025, China is expected to have a net fibre need of 250 million m3/year.

B.C. softwood lumber exports to China surpass U.S. for the first time

Trade figures for May show the value of softwood lumber exported to China has surpassed the U.S., sending powerful signals about the importance of the Asia Pacific markets for British Columbia’s economy and job prospects.

B.C. lumber shipments to China in May 2011 were valued at $122 million compared to the U.S. at $119 million.

May was a record-breaking month for B.C. softwood lumber exports to China with 746,000 cubic metres exported. From January to May, B.C. exported 2.8 million cubic metres to China, up over double from last year in both volume and value.

Year-to-date, the value of B.C.’s softwood lumber exports to all Asian destinations has now surpassed the total value of shipments to the U.S.

The provincial government and the forest industry have been working together since 2003 to diversify the market for B.C. forest products by expanding into China.

• In the first two months of 2011, China imported 907,000 cubic metres of wood products from B.C., compared with 471,000 in the first two months of 2010. Total B.C. wood exports to all markets in January and February were 3.2 million cubic metres, up about six per cent from 2010 levels.

Some things have changed for COFI sawmills—and some have not

Most regional lumbermen converging on Prince George for their annual Council of Forest Industries convention in the spring of 1975 were in a pretty sombre mood given the slumping levels of their respective businesses.

The members of COFI’s Northern Interior Lumber Sector (NILS), as it was then called, had endured a couple of tough years. The experts and commentators called it a recession or depression and the worst in 30 years. About 85 per cent of the NILS members’ total lumber production was destined for the U.S. But the market was in the tank while other operating costs were rising. The experts and commentators were predicting a high of 1.6 million housing starts by the end of 1975.

Canada’s share of the U.S. lumber market was around 21 per cent, up from about 16 per cent in 1968.

Japan, on the other hand, was registering around 2.8 million housing starts annually and the rate was increasing. Some NILS member companies had been seriously looking at the Japanese market since the early 1970s and promoting the use of SPF platform frame construction. In contrast, the B.C. coastal forest company MacMillan Bloedel began selling wood products into the Japanese market around 1923.

In 2011, it’s estimated about 70 per cent of the regional COFI membership mills lumber production is marketed in the U.S.

And a revealing fact from the summer of 2011. In May, for the first time, Chinese buyers paid more for B.C. softwood lumber exports than their counterparts in the U.S., according to B.C. Stats figures.

Some things have changed for COFI sawmills—and some have not

Most regional lumbermen converging on Prince George for their annual Council of Forest Industries convention in the spring of 1975 were in a pretty sombre mood given the slumping levels of their respective businesses.

The members of COFI’s Northern Interior Lumber Sector (NILS), as it was then called, had endured a couple of tough years. The experts and commentators called it a recession or depression and the worst in 30 years. About 85 per cent of the NILS members’ total lumber production was destined for the U.S. But the market was in the tank while other operating costs were rising. The experts and commentators were predicting a high of 1.6 million housing starts by the end of 1975.

Canada’s share of the U.S. lumber market was around 21 per cent, up from about 16 per cent in 1968.

Japan, on the other hand, was registering around 2.8 million housing starts annually and the rate was increasing. Some NILS member companies had been seriously looking at the Japanese market since the early 1970s and promoting the use of SPF platform frame construction. In contrast, the B.C. coastal forest company MacMillan Bloedel began selling wood products into the Japanese market around 1923.

In 2011, it’s estimated about 70 per cent of the regional COFI membership mills lumber production is marketed in the U.S.

And a revealing fact from the summer of 2011. In May, for the first time, Chinese buyers paid more for B.C. softwood lumber exports than their counterparts in the U.S., according to B.C. Stats figures.