Chinese Timber Market Situation and Trends - Atibt

China Timber and Wood Products Distribution Association

Liu Nengwen

Chinese Timber Market Situation and Trends

Contents01

02

03

Chinese timber supply and changing

Chinese wood product industries and changing

The trends of Chinese timber and wood product industries

Chinese timber supply and changing

01

China is the largest consumption country of timber and wood products in the world, with annually consuming 570 million m3 timbers, which includes 310 million m3

imported timbers (RWE)

15%/Domestic Commercial

Timber

5%/Farmers' fuelwood

26%/Fiber and particle board

54%/Imported Wood

Wood Supply Structure in 2018

Chinese timber importation (log and lumber) exceeded 100 million m3 for the first time in 2017, and it will keep stable growing in the future.

66,1 69,8

81,1

70,7

80,9 81,5 81,8 84,4 82,3

72,0 78

84 84

40,8 46,3

39,6 42,1

62,2

72,9 67,1

79,2

87,6 82,4

93

109 112 113

30,0

40,0

50,0

60,0

70,0

80,0

90,0

100,0

110,0

120,0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

2006-2019 Chinese Timber Supplying (million m3)

Domestic Timber Imported Timber

In 2019, hardwood importation reduced largely, but softwood importation keeps increasing

Softwood log; 7,7%

Hardwood log; -17,3%

Softwood lumber; 16,5%

Hardwood lumber; -21,0%

-25,0%

-20,0%

-15,0%

-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

2016 2017 2018 2019

Chinese timber importation growing rate

Fixed asset investment growth %

8,59,3 9 8,9

10,1 10,3 10,2 10,1 10,1 9,8 10,1

0,7

5 4,8 5,15,7 5,8 5,8

Furniture retail sales growth %

2018 2019

Hardwood importation dropped to the lowest level since 2012

2,9 3,3

5,2 4,7 5,0

6,7

4,7 3,5

4,0 4,9

5,7 5,9 6,9

2,9

8,7 9,2

10,1 9,8 9,7 10,3

6,9

5,5 6,0

6,4 7,3

8,9

10,6

4,2

0,0

2,0

4,0

6,0

8,0

10,0

12,0

2012 2013 2014 2015 2016 2017 2018

2012-2018 Hardwood Importation (million m3)

Temperate hardwood log Temperate hardwood lumber

Tropical hardwood log Tropical hardwood lumber

In 2019, tropical hardwood log importation decreased a lot, and Africa, PNG and Solomon are the main supplying regions and countries

Tropical hardwood log

Jan.-Aug. 2019 Jan.-Aug. 2018 Changing

Volume(million m3)

Prices($/m3)

Volume(million m3)

Prices($/m3)

Volume(million m3)

Prices($/m3)

Africa 2.23 416 2.88 439 -22.4% -5.3%

Asia 0.14 1364 0.23 1030 -37.3% 32.4%

Latin America 0.20 379 0.37 374 -46.8% 1.3%

PNG 2.11 186 2.43 235 -13.0% -20.8%

Solomon 1.69 175 1.93 200 -12.7% -12.2%

Others 0.08 322 0.09 358 -8.4% -10.2%

Total 6.45 296 7.92 331 -18.5% -10.5%

Except for rubber wood from Thailand, Africa is the main supplying region for tropical lumber and keeps growing

Tropical hardwood lumber

Jan.-Aug. 2019 Jan.-Aug. 2018 Changing

Volume(million m3)

Prices($/m3)

Volume(million m3)

Prices($/m3)

Volume(million m3)

Prices($/m3)

Africa 0.6 547 0.6 583 4.35% -6.14%

Latin America 0.1 664 0.1 668 -23.72% -0.66%

Thailand 2.5 294 3.1 351 -21.17% -16.31%

Others 0.7 400 0.9 494 -28.82% -18.99%

Total 3.8 363 4.8 417 -19.47% -12.86%

The tropical hardwood log from Africa decreased this year, but tropical hardwood lumber increases

Africa tropical hardwood log

Jan.-Aug. 2019(million m3)

Jan.-Aug. 2018(million m3) Changing

Equatorial Guinea 0.63 0.86 -26.98%

Mozambique 0.27 0.33 -19.02%

Nigeria 0.01 0.29 -97.39%

the Republic of Congo 0.42 0.33 28.41%

Cameroon 0.37 0.47 -21.09%

Others 0.54 0.60 -10.61%

Total 2.23 2.88 -22.39%

Africa tropical hardwood lumber

Jan.-Aug. 2019(million m3)

Jan.-Aug. 2018(million m3)

Changing

Gabon 366.55 349.40 4.91%

Cameroon 97.20 94.87 2.46%

the Republic of Congo 36.39 25.40 43.26%

Nigeria 7.76 46.80 -83.42%

Others 125.26 90.29 38.73%

Total 633.16 606.76 4.35%

Chinese wood product industries and changing

02

The value of Chinese wood product industry is about 2.2 trillion RMB, and in which the largest industries are wood-based panel and furniture

146110

650

590

200

424

147110,66

660630

180

430

0

100

200

300

400

500

600

700

Wood door Wood flooring Wood-basedpanel

Wood furniture Red wood Others

Uni

t: b

illio

n RM

B

2017 2018

In 2018, the output of wood-based panel increased a little

11,547

15,362

20,91922,3

25,5627,372

28,6830,04229,48629,909

22,7%

33,0%36,2%

6,6%

14,6%

7,1%4,8% 4,8%

-1,9%

1,4%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

40,0%

0

5

10

15

20

25

30

35

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Amount(billion m³) Growth rate

Plywood ; 71%

Fiber board; 15%

Particle board; 7%

Others; 7%

2018, wood furniture output kept stable increasing

There are more than 80 thousand companies in wood furniture industry, which employs more than 5 million staff and the output increased 6.31% last year.

221,1

301,2337,2

411,8455,8

503,1556,4

592,6630

0

100

200

300

400

500

600

700

2010 2011 2012 2013 2014 2015 2016 2017 2018

2010-2018 Wood furniture output value(billion)

Wood door industry keep stable growing, but the growing rate dropped.

Wood door production area: Guangdong 30 billion yuan, Chongqing 16 billion yuan, and Jiangshan in Zhejiang province 9 billion yuan.

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

12 1724

3240

5060

70

8894

103115 120

132146 147

Total output value of wooden doors in 2002-2018 (billion yuan)

Eventhough the production of wood and bamboo flooring decreased a little in last year, the industry value increased

In 2017, the output is 110 billion yuan, and in 2018, it is 110.66 billion yuan

378,00

479,00

629,00 604,00 689,00

760,00 774,00 838,00 826,00

789,00

0,00

100,00

200,00

300,00

400,00

500,00

600,00

700,00

800,00

900,00

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Total production of wood and bamboo flooring in China in 2009-2018 (million ㎡)

est

In 2019, the exportation of Chinese furniture and wood-frame seats dropped a lot

Furniture and wood seats exportation value (billion $)

Jan.-Aug. 2019 Jan.-Aug. 2018 Changing %

USA 4.97 6.32 -21.5%

Japan 0.83 0.84 -0.6%

Asia 2.89 3.01 -3.9%

Africa 0.57 0.53 7.1%

Europe 2.55 2.45 4.4%

America 0.79 0.83 -5.0%

Australia 0.73 0.78 -6.3%

Total 13.33 14.76 -9.7%

USA37%

Japan6%

Asia22%

Africa4%

Europe19%

America6%

Australia6%

Furniture and wood seats exportation value

est

In 2019, other wood products exportation decrease (exclude furniture and wood frame seats)

Other wood products exportation (billion $)

Jan.-Aug. 2019 Jan.-Aug. 2018 Changing %

USA 1.80 2.46 -26.8%

Japan 0.76 0.78 -3.0%

Asia 2.62 2.89 -9.2%

Africa 0.40 0.44 -7.2%

Europe 1.82 1.84 -1.1%

America 0.58 0.66 -12.4%

Australia 0.31 0.34 -8.0%

Total 8.30 9.41 -11.8%

USA22%

Japan9%

Asia31%

Africa5%

Europe22%

America7%

Australia4%

Other wood products exportation in 2019

est

As supplying-side reform going deeply, a lot of small and medial wood process

factories had been closed if they couldn’t meet the requirements of environment

and security, so the market share was transferred to large scale and popular brand .

As the implement of developing strategy of Chinese Central and West regions,

Chinese wood processing factories are transferring to those regions.

One Belt and One Road Initiative not only brings Russian and European timbers

directly into Chinese inland through Sino-Europe Express Railway, and also enlarges

wood products’ market in Europe and Asia.

New Characters in Chinese Wood Products Industry in 2019

The trends of Chinese timber and wood product industries

04

The trends of Chinese timber and wood product industries

1、Chinese Economy will keep stable growing, and the same to Chinese timber

and wood products industry

In 2018, Chinese timber consumption per capita is 0.33 m3, but the global average

log consumption per capita is 0.52 m3, so there is still growing opportunity for

Chinese timber industry.

2、Chinese timber importation will keep stable growing. As timber industry

transferring, the demand in Western and Central regions will increase a lot

The trends of Chinese timber and wood product industries

1、Chinese Economy will keep stable growing, and the same to Chinese timber

and wood products industry

In 2018, Chinese timber consumption per capita is 0.33 m3, but the global average

log consumption per capita is 0.52 m3, so there is still growing opportunity for

Chinese timber industry.

2、Chinese timber importation will keep stable growing. As timber industry

transferring, the demand in Western and Central regions will increase a lot

In the first half of 2019, there are 16 provinces that grown faster than average GDP 6.3%, which includes 11 provinces in central and western regions and 5 eastern provinces.

0

1

2

3

4

5

6

7

8

9

10

China GDP growth in the first half year (%, by provinces)

3. Chinese timber importation will optimize in the future, and lumber importation will keep increasing, and wood product’s demand will grow too.

76,1% 76,5% 75,5% 77,6% 78,9% 80,1%74,7%

66,7%

55,2%58,1% 56,5% 57,1% 58,4%

54,1% 52,1% 51,1% 53,5%

23,9% 23,5% 24,5% 22,4% 21,1% 19,9%25,3%

33,3%

44,8%41,9% 43,5% 42,9% 41,6%

45,9% 47,9% 48,9% 46,5%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

90,0%

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

原木 锯材

4. Sino-US trade friction has limited impact on Chinese timber supply, but deeply on Chinese wood products exportation. This will forces market diversification.

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China Timber and Wood Products Distribution Association