Changing competitive landscape of China’s wood market
In 2016, China’s commercial timber trade volume (including logs and sawn lumber) is about 160 million m3, of which 93 million m3 or 58% is imported representing an increase of 13.5% year-on-year (YOY).
The volume of China sawn lumber import continues to grow and reached 32 million m3 in 2016, increased by 18.57% YOY. Canada maintains its position of the second largest suppler to China although with a decrease of 6.28%, while Russia ran further apart as the largest suppler with an increase of 35.53%. China’s sawn lumber imports from other suppliers such as Finland, Sweden and Vietnam have increased significantly by 54.48%, 33.23%, 128.11% respectively.
The development of China’s wood market has been stable but some new changes have taken place in the first half of 2017. Mr. Zhu Guangqian, the Chief Expert of China Timber and Wood Products Distribution Association summed up with three observations: 
- The increase of sawn lumber import is 8.2% higher than the increase of logs. Sawn lumber will be a mainstream trend for importing timber as the manufacturing cost in China is getting higher and higher.
- The increase of coniferous timber imports is far greater than that of hardwood timber due to low inventory level of coniferous timber and the effect of logging ban.
- Unit price rises generally.
Rising Finnish Sawn Lumber
Finland exported nearly one million m3 of sawn lumber to China in 2016, increased by 54.51% YOY. The strong growth continues in 2017 and reached 800 thousand m3 YTD July and has become China’s fifth largest softwood lumber supplier.
Back in 2015 Finland initiated “Wood from Finland” Program. It is a national promotion program for Finnish sawn timber operated by Finpro and Finnish Sawmills Association. The purpose is to expand opportunities for Finnish forest products to global emerging markets. The Program has achieved good results in last two years.
The main forest products promoted in China are sawn timber, planed timber, impregnated timber and glulam. They can be applied on construction and interior decoration. More information about Wood from Finland: http://www.woodfromfinland.fi/wood-inspiration
Value proposition of Finnish Sawn Lumber
- Highly automated wood manufacturing process
- Sustainably managed forestry
- Good industry development environment built by the government
- Complete forest industry education to reserve personnel
- Reliable lumber supply throughout the whole year
- Focusing on furniture and interior decoration
Market Potential for Wood import in China
China is the biggest timber consumption country in the world. However, China’s forest resources are very limited and far from self-sufficiency and the huge gap has to be filled by importing timbers.
The commercial logging ban of natural forests effective from early 2017 has further increased the need of timber imports.
Other drivers for China’s wood demand includes the rising middle class and household income which will be reflected by demand for upgrading / renovating of apartments, décor items and furniture, etc. Increasing consumption in tourism and leisure will drive the demand of higher-quality and unique-designed resorts or holiday facilities.
Extending urbanization in central and west China including Government’s drive of developing small township in suburb areas generates continuous demand for general construction as well as wood buildings which aligns with policies of green development, energy efficiency and industrialized construction.
The market potential in China has obviously attracted various lumber exporting countries who are expanding export to China. Following further development in China’s construction’s “go green” and development of mass timber and CLT buildings in China, further dynamics and changes in competitive landscape are expected.