Lumber prices in China

The value of imports of softwood lumber to China in January-September 2013 increased by 25.9% year-on-year to reach $2.64 billion. After the slowdown in 2012, the rise of the housing market in the country triggered a boom for roundwood and sawnwood. In the coming years, Chinese villagers will continue moving to the cities, and the demand for cheap housing will continue to grow, so by 2015 the Forestry Agency of China predicts a serious shortage of wood products.

The leading suppliers and the major competitors in the Chinese market are Canada and Russia: in Q3 2013, Canada shipped softwood lumber worth $390.6 million to China, Russia – $336.8 million.

Average import prices for products from these two countries are roughly equal ($193 from Canada and $190 from Russia in 2012): sea transportation from Canada across the Pacific costs even cheaper than rail deliveries from the Russian mills. Because of this, the Chinese prices are comparable, although export prices for Canadian products are higher than for Russian.

China actually saves European manufacturers this year and compensates for the decline in the home market. Finland and Sweden increased exports several times since the end of 2012, however, in absolute figures, deliveries to China are still low.

Very low prices at the border points of Kyakhta and Naushki can be explained by the fact that at the border there are numerous sawmills, which are often owned by Chinese businessmen. These enterprises produce cheap and roughly-cut products that are delivered to China for further processing. Transportation costs of these mills are also low due to their geographical location.

The average FOB price in January-September 2013 amounted to about $170 in the Far Eastern ports of Vanino and Nakhodka, and approximately $200 in St. Petersburg. Rates on FCA terms in the same ports are $10 lower on the average, while CIF Shanghai price grows to $216.

Since 13 November 2013, export prices for lumber from Canada and the USA, including on deliveries to China, are published in the price section of WhatWood Weekly. Detailed article for this infographics is also available in the recent issue of Weekly.

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