Chinese buyers bypass sawmills in U.S., tightening the market

Chinese buyers are getting more logs directly from exporters, completely bypassing sawmills in the United States (U.S.), and according to Gerald Storey of Storey Sawmill & Lumber Co. based in Troy, Tennessee, U.S., not only are log exporters getting better quality material, they are purchasing them at well above average market prices.

But as Woodworking Network reported, Storey Sawmill was not the only one experiencing this; other competing sawmills in the area are encountering the same thing.

Storey told the Woodworking Network that the Chinese buying had originally begun a few years ago, though it slowed down for while before picking up again.

“The Chinese are subsidising their companies to the extent that U.S. sawmills can’t compete for the timber and logs in our area,” Storey said. “The Chinese are also illegally receiving logs not fumigated into their country to cut their cost. U.S. log exporters are going to force U.S. sawmills out of business.”

All this, despite exports of red oak dramatically increasing through three quarters of 2017 – as reported by Global Wood Markets – a 64 per cent rise, and making up some 29 per cent of the total log export of the U.S. at 16 million cubic feet.

Meanwhile, with a 19 per cent jump in imports, China has maintained its position as the top recipient of hardwood logs from the U.S.

But increasing demand in an already tight market in the U.S. could raise lumber prices, especially if there is a shortage of logs. And presently, according to the Woodworking Network, sawmills are beginning to run low in log inventory, further tightening the market.


Source: Woodworking Network