CW China signs MOU with Qingdao Commodity Exchange Center

Tian Qibin (left), chairman of Qingdao Commodity Exchange Center, shakes hands with Eric Wong, Country Director of Canada Wood China, after signing the MOU on May 22, 2018.

Canada Wood China has inked a MOU with Qingdao Commodity Exchange Center to jointly promote the use of Canadian wood in China.

Representatives from the two sides signed the MOU at a ceremony in Qingdao on May 22, 2018.

As a listed firm, Qingdao Commodity Exchange Center aims at expanding its trading platform to cover Canadian lumber and wood products. The center pledged to use its market influence to highlight the benefits of furniture made of wood from Canada, especially to manufacturers of high-end furniture. Meanwhile, CW China will introduce Canadian wood suppliers to the exchange center and offer technical training and support, according to the MOU.

The two will also set up a joint work team, the MOU said.

Qingdao is the largest city in Shandong Province and is a major seaport, naval base, and industrial center.

Fire safety symposiums held in Shanghai and Beijing

Guest speakers at the event venue in Shanghai on April 27th.

Canada Wood China joined European Wood to hold symposiums on fire safety in timber structures. The first was in Shanghai on April 27th while the second was in Beijing on April 28th.

The seminars attracted more than 400 industry professionals including researchers, designers and developers. Five guest speakers from Canada, Europe and China gave presentations on fire safety attributes in modern timber structures. They also shared insight into the history and evolution of fire safety code requirements for timber structures in Canada and Europe. The latest in fire research, alternative solutions in fire safety design, and fire safety codes for timber structures in China were also discussed.

Audience members listen to a presentation at the event venue in Beijing on April 28th.

Officials from the Canadian Embassy, Canadian Consulate in Shanghai and MOHURD attended the seminars and made opening remarks.

Low-carbon special economic zone to be built in Xiong’an, China

The Chinese government has announced in April the location of a special economic zone (SEZ) that will effectively serve as an extension of Beijing.

The Central Committee of the Communist Party of China and the State Council, China’s Cabinet, jointly announced Xiong’an New Area will be established in Hebei Province.
The 100 sq km (38.6 sq mile) zone is expected to eventually expand to 2,000 sq km – nearly three times the size of New York City. It’s a key component of a “mega-region” developing around Beijing, Tianjin and Hebei.
President Xi Jinping said Xiong’an – home to one of China’s biggest wetlands – would be developed to world class standards with a focus on ecological protection and well-being.
The SEZ will be developed into a green and low-carbon city while characteristic small towns will be built around it, according to a circular issued by the government.
An official with the preparatory committee said they might welcome high-tech companies involved in 5G communications, biomedicine, artificial intelligence and internet finance, according to Xinhua News Agency.

CW China teams with furniture association to increase market influence

Alex Wu, business development manager of Canada Wood China (left), and Brian Leslie speak at the seminar.

Canada Wood China has signed a MOU with United Furniture Association (UFA) in Dongguan City to further cooperation in the Chinese furniture industry.

The MOU ceremony was a part of a seminar held by the two parties on wood applications in the furniture industry on March 27th. More than 50 people including buyers, furniture designers and wood suppliers attended the event. Canadian experts Brian Leslie was invited as keynote speaker to introduce Canadian lumber.

Canada has abundant wood resources and is one of the fastest growing exporters of lumber to China. Canadian exports of lumber to China have risen more than 1,837% in the last decade. UFA is an online platform that features more than 100 furniture sourcing companies and over 3,000 furniture raw material vendors. It launched in October 2017. Turnover reached 2.5 billion yuan (CAD$500 million) from nearly 300,000 business transactions within the first three months.

China Economic Update

2018 Q1 highlights:

  • Based on the report issued by the official statistics bureau on April 17th, China’s GDP growth increased 6.8% in the first quarter which exceeded the previous expectation (6.7%); real estate investment is expected to go slower because China intends to restrain excessive speculation in this sector;i
  • The industrial output growth in March 2018 slowed down to 6% year-on-year compared to the 7.2% from January to February period which showed the strengthen policy to reduce environmental pollution from industry; retail sales are estimated to have rose 9.7% in March which match readings in the first two months, meanwhile industrial production increased 6.4%, made a slower pace compared from January and February; fixed asset investment grew slowly to 7.5% year-on-year from January to March 2018, decreased from 7.9% in January and February this year. Above-mentioned indicators are combined for the first two months of the year because of the annual holiday in China.ii

PMI (Caixin) indexes decreased unexpectedly to 51.0 in March 2018 from 51.6 in February which skipped market consensus of 51.8.iii China Exports dropped 2.7% year-on-year to USD 174.12 billion in March 2018 which didn’t make the market expectations of a 10% growth.iv

China Consumer Price Index (CPI) fluctuated, rose from 101.5 (January 2018) to 102.9 (February 2019) and then decreased slightly to 101.7 (March 2018).v USD/CNY fluctuated, increased from 6.30 (February 1st) to 6.36 (March 1st) and then went slightly lower to 6.29 (April 1st);vi CAD/CNY dropped continuously from 5.13 (February 1st) to 4.95 (March 1st) to 4.88 (January 1st), hit the lowest spot (4.83) on March 16th during the past 12 months.vii

Building material prices

Cement price dropped slightly from RMB 410.83 to RMB 398.33 per metric ton (down 3.04%) over March 2018.viii Rebar steel price went down by 12.22% from RMB 4,088.12 per metric ton on March 1st 2018 to RMB 3,588.46 per metric ton on March 31st 2018.ix The log price index in March 2018 was 1,115.91 points which decreased 0.48% less than February 2019 and grew 2.22% compared to the same period year-on-year; the lumber price index in March 2018 was 1,123.99 which went down slightly of 0.33% month-on-month and decreased 0.56% year-on-year.x

Wood import of Chinaxi

Normally during Chinese New Year (January to February) wood imports to China tend to decrease lower while volume of wood inventory stays higher in most ports. This year the volume of wood imports in total dropped to a new low at 5.49 million m3 in February which decreased 14.81% year-on-year and 35.28% month-on-month. On the contrary log and softwood inventory at Taicang, Wanfang and Meijing Ports increased steady from September 2017 (1.05 million m3) and hit 1.26 million m3 in February 2018, the latter figure shows 2.5% growth year-on-year and fits the total trend. Based on the market trend in previous years it is expected to see wood imports to China to go up and inventory goes down in the coming months. This trend shows consistency when it comes to softwood lumber imports from Russia and Canada, both figures decreased to new lows in February 2018 during the past 12 months especially for Canadian softwood lumber (194,423m3) which dropped 38.93% year-on-year and almost half (44.95%) compared to the volume of last month.

i Huileng Tan (April 17th, 2018). China says its economy grew 6.8% in the first quarter of 2018, topping expectations
ii Bloomberg News (April 16th, 2018). China’s Economy Brushes Aside Trump to Power Ahead in 2018
iii Trading Economics (April 17th, 2018). China Caixin Manufacturing PMI
iv Trading Economics (April 17th, 2018). China Exports
v Trading Economics (April 17th, 2018). China Consumer Price Index (CPI)
vi XE Currency Charts: USD to CNY
vii XE Currency Charts: CAD to CNY
viii Sunsirs (April 2018). Spot Price for Cement
ix Sunsirs (April 2018). Spot Price for Rebar Steel
x BOABC (April 2018). China Wood and Its Products Market Monthly Report
xi BOABC (January to April 2018). China Wood and Its Products Market Monthly Report