{"id":11291,"date":"2023-10-08T09:30:36","date_gmt":"2023-10-07T22:30:36","guid":{"rendered":"https:\/\/woodcentral.com.au\/?p=11291"},"modified":"2024-10-21T20:27:37","modified_gmt":"2024-10-21T10:27:37","slug":"china-timber-production-rebounds-yet-weak-fundamentals-remain","status":"publish","type":"post","link":"https:\/\/woodcentral.com.au\/china-timber-production-rebounds-yet-weak-fundamentals-remain\/","title":{"rendered":"China Timber Production Rebounds, Yet Weak Fundamentals Remain!"},"content":{"rendered":"\n

China’s economy is stabilising<\/a> after a flurry of modest policy measures, including a Notice on Several Measures to Promote Home Furnishing Consumption, has seen <\/em>Chinese factory activity increase for the first time in six months.<\/p>\n\n\n\n

And in positive signs for the global timber market, China’s Global Timber Index (GTI) – which measures timber activity across seven pilot countries – registered 52.6% for August, the second consecutive month the index exceeded the 50% threshold for growth.<\/p>\n\n\n\n

According to the Chinese National Bureau of Statistics, the Purchasing Managers’ Index (PMI) rose to 50.2 in September from 49.7, correcting a half-year decline in manufacturing activity.<\/p>\n\n\n\n

The Chinese economy sagged after a burst in early 2023 when its zero-tolerance COVID policies were lifted, and its slowdown significantly impacted global timber markets.<\/p>\n\n\n\n

As the world’s largest consumption market, meeting 18% of global demand and 71% of Asian demand last year<\/a>, it has the highest reliance on imports – with the share of imported wood is 55%, and it includes sawn timber, logs, pulp and paper.<\/a><\/p>\n\n\n\n

As a result, China now accounts for more than 60% of New Zealand’s export trade in sawn wood<\/a>, and due to sanctions arising from the war in Ukraine, more than 83% of Russia’s export trade with conflict timber now using China as a “red lane” to enter global markets. <\/a><\/p>\n\n\n\n

Nonetheless, demand for imports has fallen 6% over the past three years, mainly driven by the construction sector, which represents around 45% of demand, leading some economists to allege the emergence of a “timber tantrum” in export markets.<\/a><\/p>\n\n\n\n

In late August, the Chinese government released a new housing policy with four “first cities including Beijing, Shanghai, Guangzhou and Shenzhen, announcing that “families that own no property in the region, regardless of whether they have taken a loan in the past are to be treated as first home buyers eligible for favourable mortgage conditions.”<\/p>\n\n\n\n

However, whilst production for consumption has rebounded, Chinese manufacturers are now suffering from a slowdown in export orders.<\/p>\n\n\n\n

Major exports include processed products, such as wood furniture and plywood, which account for about 60% of China\u2019s total wood product exports by value.<\/p>\n\n\n\n

In 2021, China<\/a> exported $5.67B in Plywood<\/a>, making it the world’s largest exporter, producing 71% of the global supply of the material.<\/p>\n\n\n\n

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