Due to the bark beetle infestation, the European countries have gained serious market shares in China’s softwood logs and sawn timber imports. And this trend is not going to end soon…
In 2020, China’s imports of logs + sawn timber totaled 107.573 million cubic meters, down -5.2% year-on-year. Imports reached in value US$16.04 billion, down -11.8% year-on-year, and the average unit price was US$149 per cubic meter, down -6.9%. But overall, the downward trend has slowed down.
Except for Europe and Asia, all other regions declined or remained flat. The increase in imports of European timber was due to the large amount of timber harvested from damaged forests which was exported to China. Chinese imports of Japanese cedar logs also increased by 23.2%.
Import prices were stable in 2020, but they have risen rapidly in the last month. It is expected that they will gradually calm down after April.
Overview of China’s softwood log imports
Chinese imports of softwood logs reached 46.856 million cubic meters in 2020, a decrease of -6.5%, with an average unit price of US$117 per cubic meter, an increase of 2.9%. From the perspective of importing regions, except for the growth of softwood logs from Germany, the Czech Republic and Japan, all other regions have declined, but the decline has slowed at the beginning of 2021.
China’s main import source countries of softwood logs:
|Softwood logs||2020||2019||Evolution in %|
|Rest of Europe||180.04||204.88||-12.12%|
Europe needs a lot of logging due to the bark beetle epidemic in the last years. It is estimated that the damage to European spruce will reach 500 million cubic meters by 2024!
For the past five years, forest departments and wood processing companies in central European countries have been dealing with the consequences of climate change on the forests. This phenomenon is mainly caused by the drought in summer and the consequent infestation with bark beetles. Only the Czech Republic, Austria and Germany have accumulated about 250 million cubic meters of damaged wood.
Based on past disaster development processes, published forecast reports and a large number of expert discussions, this number will reach its peak during 2021. Even assuming that the disaster is slowly receding, in the next five years, the damaged wood is expected to reach 500 million meters, and in the next 10 years, the amount of damaged wood will accumulate to nearly 750 million cubic meters.
This year, European exports of softwood logs to China have increased significantly. Among them, the number of imported German softwood logs was 9.982 million cubic meters, an increase of 162.4% year-on-year, accounting for more than 60% of European softwood logs exported to China. The softwood log market share of Germany in Chinese imports reached 21.3%; an increase by 13%, which was 2.2 times that of Russia’s exports of softwood logs to China.
The large volume and low price of European softwood logs has impacted the Chinese imports from Russia, North America, and New Zealand. This year, China’s imports of Russian softwood logs have dropped by 23.6% (but also due to Russian policy factors), while Canadian softwood logs have declined by 49.2%. Chinese imports of US softwood logs fell by 13.5% (related to the strong demand in North America), and imports of New Zealand softwood logs fell by 8.4%.
Chinese imports of New Zealand softwood logs accounted for 34.5% in 2020, but in 2019 accounted for 38.7%, a decrease of 4.2 percentage points. Softwood logs imported from Europe in the second half of 2020 have exceeded New Zealand logs.
Since November 2020, due to the coronavirus pandemic, the import of radiata pine in Queensland, Australia has been suspended, with a decline of -1.7% throughout the year. It is expected that the supply of Australian radiata pine logs will be greatly reduced in the future, due to the current import ban.
The China-Europe Railway Express has unlocked the European timber supply chain. Coupled with lower prices, European spruce beetle logs may change the supply pattern of softwood logs in China.
As the inventory declines and supply expectations decrease, the price of softwood logs is expected to face some upward pressure, but there is little room for increase.
China’s softwood sawn timber imports
China imported 24.821 million cubic meters of sawn timber, in 2020, with a unit price of US$177 per cubic meter, down -10.3% and -0.7% year-on-year respectively.
The main source countries of imported softwood sawn timber:
|Softwood sawn timber||2020||2019||Evolution in %|
|Other European countries||77.67||47.65||63.0%|
Russia and Canada, the two main source countries of imported softwood sawn timber for China, both dropped sharply, down -13.1% and -37% year-on-year respectively. However, Russian softwood sawn timber still accounts for 60% of China’s imports of softwood sawn timber. Dominant for the last 6 years. Due to various factors such as resource problems, increased demand in the North American market, increased shipping costs, the impact of low-priced European beetle wood, and the inability of Canadian sawn timber to meet the needs of the Chinese market in time, the proportion of Canadian sawn timber in the Chinese market has dropped significantly.
In 2020, imports of European softwood sawn timber was 5.439 million cubic meters, an increase of 25.3%, of which Sweden increased by 25.7%, Germany increased by 36.7%, Ukraine increased by 23.3%, and Belarus increased by 139.9%. The main reason is that the bark beetle infestation has increased the output of softwood sawn timber.
Due to the fact that Finland and Sweden have lowered the price of sawn timber in Northern Europe, the other countries in Europe were forced to lower prices. In 2020, the volume of China’s imported Finnish softwood sawn timber fell by -21.8%, while imports from Swedish softwood sawn timber has increased sharply by 25.7%, and the volume is now close to Finland. It is reported that the decrease in Finnish exports is also related to the strikes of forest industry workers.
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