“China’s Fibre Deficit”

China forest products import data released this morning for October (CIBC Equity Research):

  • Lumber – In Oct 2013 China imported 2,170,000 m3 of lumber at an average cost of $286 per m3. Lumber imports are up 34% compared to Oct 2012 when they were 1,620,000 m3. YTD lumber imports are 19.720 million m3 compared to 16.870 million m3 in the prior period (up 16.9%).
  • Logs – In Oct 2013 China imported 3,680,000 m3 of logs at an average price of $201 per m3. Log imports are up 61.4% compared to Oct 2012 when they were 2,280,000 m3. YTD log imports are 36.940 million m3 compared to 31.390 million m3 in the prior period (up 17.7%).

Interestingly, the report notes Russian log exports to China are down nearly 8.2% YTD. This decrease is explained by Russia’s export taxes on logs over quota limits and increasing log harvesting and transportation costs. Evidently filling that gap, there were substantial increases in log imports from New Zealand and the U.S. Pacific Northwest: “In fact, New Zealand is now a larger log supplier to China than Russia, which would have been unthinkable five or six years ago.” The October breakdown for B.C. exports is pending.

“We estimate that China’s fibre deficit in 2013 will be approximately 168 million m3 and it is forecast to grow some 30 million m3 (9% per annum) over the next two years.”
– Mark Kennedy, CIBC

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