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The summer rains arrived early this year in China and with unusual intensity. Over the past weeks, the average precipitation in the Yangtze River Basin reached a record high since 1961.

China has experienced the worst floods in several decades and over 2m people have been displaced with over heavy damage reported. Surprisingly, the weeks of torrential rain has not significantly slowed down construction activity. Daily port offtake of logs volume is still around 65k.

Logs continue to arrive in China from all around the world. Of the 12 break bulk vessels arriving at Lan Shan port between the 4th and 17th July, 8 are from New Zealand with one each from USA, Australia, Uruguay and Brazil.

There is also a break bulk shipment of logs currently being loaded in Germany bound for China. It is difficult to see how this long and relatively expensive shipping route can be sustainably cost effective but may be more a negotiating tool against the rising container and rail costs.

Log inventory in China has increased about 300-500k over the last month to 4.1-4.3m mwith very high levels particularly in the Yangtze Delta region. Log exporters are quietly cautious but optimistic about CFR pricing.

There are early signs of China export markets recovering. The impact of the current floods is also likely to have an impact.

The post Floods in China expected to have an impact on timber demand appeared first on Timber Industry News.