China’s imports of softwood lumber from Russia from January to July decreased by 19% year-on-year, a fall of 1.7 million cubic meters. The average price of SF grade spruce has dropped to USD350/m3 and below, and the price of SF grade pine is following a similar trend. At present, the pine price is firm at around 370$/m3.
From January to July, the volume of imported softwood lumber from Canada decreased by 54% year-on-year, a net decrease of 1 million cubic meters. Limited by the logistics bottleneck between China and Canada, the delivery and arrival of SPF will not be smooth in the short term. The high log cost and successive production restrictions announcements will greatly slow down the SPF downward speed.
The volume of Chinese imported softwood lumber from Germany, Sweden, and Finland decreased by 800,000 cubic meters in January-July 2021, a decrease of 56% year-on-year. More recently, European softwood lumber offer has started to increase, but the price of high-grade lumber has fallen slightly. The demand for European lumber from North America and own domestic market will directly determine the trend in supply to China. At present, German low-grade lumber price has fallen to USD250-260/m3. It is expected that in September, the price will further increase.
In January-July, the volume of imported softwood lumber from Ukraine & Belarus increased by about 10,000 cubic meters year-on-year, almost the same as the same period last year. The price increased slightly in August at around USD240-USD250/m3. In mid-August, Belarus began to impose tariffs on sawn timber exported to most countries, further increasing the cost of exports to China. The recent incidents such as Ukrainian letter of credit fraud have attracted the boycott of Ukrainian companies from companies and banks, which further reduced the trust in Ukrainian lumber.
In August, Canadian and European lumber producers, which generally have focused on the domestic market and US, have paid more attention to China. The overall demand in the Chinese market is weak, inventory has further accumulated, average daily shipments are hovering at a low level, market prices have fallen slightly, and downstream customers are not willing to stock up. It is worth noting that the Chinese export of wood products, which consumed a large amount of sawn timber in previous years, have experienced the overall container crisis in the first half of the year.
As of September 8, the softwood lumber inventory in major regions of China (excluding the three continent road ports and Ningbo) is about 1.42 million cubic meters (Taicang 890,000, Tianjin 62,000, Qingdao 135,000, Chengdu 115,000, Ganzhou 100,000, Yantian 11 10,000), an increase of 40,000 as compared to August 8.
As of August 8, the softwood lumber inventory in Taicang was 887,000 cubic meters, a decrease of 20,000 cubic meters from July. Among them, SPF inventory was 44,000 cubic meters, which is a decrease of 10,000 cubic meters compared with the July inventory.
From January to July 2021, China’s imports of softwood lumber decreased by 27% year-on-year, a net decrease of about 4 million cubic meters. Except from Ukraine where imports increased, the rest all decreased to varying degrees.
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