China

In the face of all the cautionary headlines surrounding a slowing Chinese economy in recent weeks, there’s certainly been some major upticks in China’s forest products imports. According to a fresh report this week from Mark Kennedy, CIBC Forest Products Analyst, China imported 2.200 million m3 lumber last month, up a whopping 28.7% compared to July 2012 when they were 1.710 million m3. YTD lumber imports are 13.120 million m3 compared to 11.880 million m3, an increase of 10.4%, over the same period a year ago. Interestingly, softwood lumber exports YTD from B.C. are actually down 7.1% compared to the same period in 2012 (3.490 million m3 vs 3.756 million m3). In fact B.C. exports of softwood lumber to China in June were down hard 19.5% from June 2012. Mark attributes this significant decrease to the higher lumber prices this spring. “Seeing record lumber pricing from North America, Chinese buyers responded by seeking supply, if available, from other regions. In some cases, Chinese buyers also switched to purchasing logs rather than lumber, which could explain log imports being nearly 20% higher this June over June 2012.” While China’s lumber imports from Germany, Chile, and New Zealand have reportedly increased significantly, “Russia provided the volume that offset the decline from Canada.” Mark suggests a reversal in this trend is underway, noting that Chinese orders from B.C. “have picked up considerably” in July and August.

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