China Economy, Construction & Lumber Shipments

February economic highlights: 

  • China has lowered its expectation for economic growth to around 6.5% in 2017 which is still in line with analyst predictions.
  • The budget deficit target is at 3% of GDP in 2017, while the target for China Consumer Price Index (CPI) is around 3% and M2 growth target is around 12%[i].
  • The government intends to eliminate tens of millions of tons of excess capacity in coal and steel industries which would put hundreds of thousands of workers out of work.
  • Analysts doubt 2017 can match 2016’s economic growth. For instance, exports will not grow significantly and currency depreciation are expected to be offset by rising wages[ii].

The Chinese government is targeting a 6.5% growth rate in 2017.[iii] The Economist Intelligence Unit pegs its GDP growth forecast at around 6.4%; they predict that there will be high spending on infrastructure, property sector slowdown and tighter monetary policy.[iv]

Caixin PMI decreased from 51.9% in December to 51.0%[v] in January which is still higher than most months in 2016, except October (51.2%). Exports value dropped from USD 209 billion[vi] in December to USD 182 billion in January which is now lower than the average value (USD 189 billion) since July 2016.

China Consumer Price Index (CPI) increased from 102.1(December) to 102.5 (January)[vii] Index Points which marks the highest rate since February 2016. USD/CNY decreased slightly but consistently from 6.94 (January 1st) to 6.88 (January 30th) to 6.88 (February 1st) to 6.87 (February 28th)[viii]; CAD/CNY on the other hand fluctuated from 5.17 (January 1st) to 5.28 (January 30th) to 5.27 (February 1st) to 5.16 (February 28th)[ix].

Building material prices 

Regarding common building material prices, price for cement in China declined 0.68% from RMB 293.50 per metric ton on February 1st to RMB 291.50 per metric ton on February 28th [x]; rebar steel was worth RMB 3,219.33 per metric ton on February 1st and then increased dramatically by 15.50% to RMB 3,704.00 per metric ton on February 28th [xi].

Wood Export to China 

  1. China’s log imports in January 2017 reached 4 million m3 with 9.24% growth year-on-year but decreased 2.77% from December 2016. The import volume of softwood log constituted 66.3% of the total with 2.61% decline year-on-year[xii].
  2. The average price of imported logs in January was USD 168.36/m3 with 1.13% decline year-on-year and 1.74% decline month-on-month[xiii].
  3. China’s lumber imports in January 2017 reached 2.39 million m3 with 7.92% growth year-on-year. However the volume dropped dramatically by 19.55% compared to December 2016. In the same month softwood lumber imports contributed 72.13% of the total with 4.51% growth year-on-year[xiv].
  4. The average price of imported lumber in January was USD 250.14/ m3 with 3.02% decline year-on-year and 6.09% decline month-on-month[xv].

[i] Reuters with CNBC(March 4th, 2017). China aims for around 6.5 percent economic growth in 2017

[ii] Gordon Orr (January 2017). What can we expect in China in 2017?

[iii] Reuters with CNBC(March 4th, 2017). China aims for around 6.5 percent economic growth in 2017

[iv] Tom Rafferty. “Politics trumps all: Outlook for reform and growth in China in 2017”. Asia Regional Strategic Forecast 2017 (March 9th 2017), Economist Corporate Network, Shanghai, China.

[v] Trading Economics (March, 2017). China Caixin Manufacturing PMI

[vi] Trading Economics (March, 2017). China Caixin Manufacturing PMI

[vii] Trading Economics (March, 2017). China Consumer Price Index (CPI)

[viii] XE Currency Charts: USD to CNY

[ix] XE Currency Charts: CAD to CNY

[x] Sunsirs (March 2017). Spot Price for Cement

[xi] Sunsirs (March 2017). Spot Price for Rebar Steel

[xii] BOABC (February 2017). China Wood and Its Products Market Monthly Report

[xiii] BOABC (February 2017). China Wood and Its Products Market Monthly Report

[xiv] BOABC (February 2017). China Wood and Its Products Market Monthly Report

[xv] BOABC (February 2017). China Wood and Its Products Market Monthly Report

Korea Forest Research Institute scientists attend Lumber Grading School in Alberta

Dr. Kim, Norm Dupuis of AFPA and Dr. Shim

Dr. Kim, Norm Dupuis of AFPA and Dr. Shim

By Chuck Dentelbeck, President CLSAB

During the week of April 25th Dr. Shim and Dr. Kim from the Korea Forest Research Institute (KFRI) attended the Alberta Forest Products Association (AFPA) lumber grading school in Grande Prairie, Alberta.  Both scientists are very involved in development and implementation of new requirements for wood products in Korea.  Dr. Shim and Dr. Kim enjoyed their week and were successful in their exam, obtaining a “B” NLGA grading ticket.

CLSAB, Canada Wood, NLGA, NRCan and Global Affairs Canada have been working with KFRI for two years to secure continued seamless access for Canadian lumber into Korea. This after Korea proposed new import requirements for sawn lumber in 2014.  At the first meeting between KFRI and Canadian delegates in 2014, an invitation was extended to Korean officials to attend a lumber grading school in Canada.  When the opportunity presented itself Norm Dupuis of AFPA made it happen.  In addition, Dr. Shim and Dr. Kim, with CLSAB auditors in attendance, observed an AFPA grade inspection at the Weyerhaeuser facility in Grande Prairie.

Attendance at the training school and participation in an agency grade inspection improves the understanding of the Canadian grading system by key representatives of the Government of Korea.  We believe that this will assist in advancing modifications to the proposed import requirements to maintain continued access for Canadian lumber into Korea.

Director’s Message

Work in the Shadows

Jieying Wang, Senior Scientist, Durability and Sustainability, FP Innovations, examines Canadian treated wood samples that have been in the ground four years.

Jieying Wang, Senior Scientist, Durability and Sustainability, FP Innovations, examines Canadian treated wood samples that have been in the ground four years in Korea. The collected data will be used to demonstrate durability performance of Canadian wood species.

Most of what is known and appreciated about Canada Wood activities and programming takes place in the open, often publicized and visible to industry. Frequently however crucial work takes place behind the scenes on issues that have potential to be disruptive and damaging to industry exports: e.g. phyto-sanitary rules imposed by foreign plant protection authorities or technical barriers to trade erected by code authorities. Resolution is usually not straight forward and, while important to advise industry about the emergence of problems, it is not always wise to publicize widely. Continue reading

Chinese Journalists and Construction Companies Attend Forest Products Program

September 3-10, 2014 in Vancouver

IMG_2390

The delegation gets close and personal on an active logging site in Mission, BC.

A delegation of thirty construction professionals and journalists attended a week long forest products and wood-frame construction program. The program included wood design training at the Global Buyers Mission in Whistler, construction sites visits, and an active logging site tour. Journalists from a Shanghai based bilingual magazine called ECO-nomy conducted interviews with the City of Vancouver about its 2020 Greenest City Action Plan as well as with several forest products representatives as well as with several architects.

Group gets to witness the largest spanning wood roof in North America at the Richmond Olympic Oval .

The Group gets to witness the largest spanning wood roof in North America at the Richmond Olympic Oval .

The wood design and construction industry in China is still in its infancy, but several company reps in this delegation acknowledged that wood construction has a very promising future in China. Here are some notable quotes from some of the Chinese attendees:

qthumb-Li-Xiangdong
“The Chinese government is promoting eco-cities and wood is the most eco-friendly building material there is. It was encouraging to see well managed forests and sustainable logging practices. This program has made me a true advocate of wood products and wood buildings.”
General Manager, Tianjin Rishang Integrated Housing Co., Ltd., Li Xiangdong.
qthumb-Qin-Bangguo
“Canadian designers and site workers have a very high standard. Everything has to
be perfect. I hope that my company can adopt this ideology.”
General Manager, Yingkou Integrated Houses Co., Ltd., Qin Bangguo.
qthumb-Su-Jiansong
“China needs more residential and commercial wood buildings because of its superior seismic performance. More wood construction means safer living.”
President, Gyours Decoration Co., Ltd., Su Jiansong.
qthumb-Shi-Zuhong
“China will adopt more wood construction systems in the future because it is the only environmentally friendly building material. There is increasing pressure from both the Chinese government and society to construct buildings that are greener. Wood is more expensive, but you get what you pay for.”
Chairman of Hubei Jinxinlong Steel Structure Industrial Co., Ltd., Shi Zuhong.