Jump in landed cost of North America logs

Traders in China are blaming the depreciation of RMB and the trade war between China and the U.S. for the 30 per cent jump in the landed cost of imported North American logs.

Despite the lowered log prices by U.S. shippers to maintain market share in China, the higher costs continue to be a major challenge to Chinese importers.

However, landed costs are getting higher than before, even after price reductions. This means competitiveness in the domestic market has weakened and traders are losing out to alternative timbers.

According to Globalwood.org, the current price for grade A processing general materials (2-4m) North America hemlock and fir in the Guangdong market is between RMB1680-1760 per cubic metre. The price for grade A processing general material (2-4m) southern pine is between RMB1580-1660 yuan per cubic metre.

Drop in plywood imports

In the first half of 2018, China’s plywood imports fell 9 per cent to 79,400 cubic metres. Imports from Malaysia were the highest at – 22 per cent, followed by Indonesia and Russia imports which saw a drop of 11 per cent and 10 per cent respectively.

 Russia wood makes up the highest percentage of China’s plywood imports in the first half of 2018 at 27 per cent (21,100 cubic metres), followed by Malaysia at 25 per cent (19,850 cubic metres) and Indonesia at 19 per cent (15,000 cubic metres).

Increase in timber imports from Japan

According to the data from China Customs, China has more than doubled log imports from Japan, resulting in an increase from 311,600 cubic metres in 2014 to 750,600 cubic metres in 2017. In 2017, log imports from Japan were worth US$102.44 million and the average price for logs from Japan rose 8 per cent to US$136 per cubic metre.

In 2017, China’s sawnwood imports from Japan were 74,600 cubic metres valued at US$18.44 million, a growth of 39 per cent in volume and 32 per cent in value. The average price for sawnwood from Japan was down 5 per cent to US$247 per cubic metre.