China imported 15 per cent less sawlogs in the first half of 2012 than in 1H/2011; in addition, prices for domestic and imported softwood logs were lower than last year, reports the Wood Resource Quarterly.
The slowing economy in China has reduced the importation of logs from New Zealand, Russia, and the US by about 15 per cent during the first six months of 2012. Prices for imported and domestic softwood logs in China have fallen this year by 14 per cent and 10 per cent, respectively as reported in the Wood Resource Quarterly.
China’s phenomenal GDP growth of between 9 and 14 per cent annually over the past decade slowed down last year and is forecasted by International Monetary Fund (IMF) to be only 8.25 per cent in 2012. Reduced investments in public projects and a cooling residential property market have resulted in a decline in the importation of sawlogs during the first six months of 2012.
Softwood log imports in the first and second quarter this year were 6.2 millionm3 and 6.6 million m3, respectively, down from all-time high of 8.6 million m3 seen in the 3Q/11, reports the Wood Resource Quarterly. The total imports for the first half of 2012 were 15 per cent lower than during the same period last year, with the biggest declines occurring in shipments from Russia, the US, and Australia.
Western Canada is the only major supplier that has increased shipments so far this year; annual shipments may reach over 2.5 million m3, which would be a record high. The reduced demand for logs in China has not only impacted import volumes, but also prices for domestic and imported logs. The average price for imported softwood logs was down 14 per cent from 2Q/11 to 2Q/12. Prices for New Zealand radiatapine logs dropped the most, while red pine logs from Russia showed the smallest price drops as compared to other species of imported softwood logs.
Domestic log prices in China have also fallen over the past year, with Chinese fir prices being down six per cent year-over-year in the 2Q/12, according to the WRQ. Mongolian pine and larch prices were also lower by 8 and 16 per cent, respectively. Contrary to the recent downward price trend for softwood log, prices for domestic hardwood logs, including Eucalyptus, birch, and poplar, have gone up this year and were close to, or at record-high levels in the 2Q/12.
Much uncertainty surrounds investment activities in the Chinese construction sector, private consumption in the country, and the demand for Chinese forest products in North America and Europe. If the assumption that the Chinese domestic consumption and private investments will improve somewhat in the 2H/12, as IMF forecasts, both softwood and hardwood log prices are likely to stop falling and instead increase slightly in the second half of 2012.
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