2022 Canadian Lumber Shipper’s Meeting in Shanghai
On March 9th, Canada Wood China (CW China) hosted the 2022 Lumber Shipper’s Meeting, to discuss the current environment for Canadian lumber trade with China. 2021 has been a complex year for international trade, with supply chain disruptions, volatile commodity prices, and ongoing travel restrictions. More specific to lumber markets in China, we have seen new regulations for customs clearance and changes to the ports accepting timber shipments.
The event was organized to discuss outlooks for the market, and to receive some feedback from the Embassy of Canada in China regarding customs clearance requirements. With opening remarks delivered by the President of the Canada Wood Group, Bruce St. John, we were also joined by the Consul General of Shanghai, Dave Murphy, who shared some perspectives on the bilateral trade relationship, and the China Operation Manager of FEA Jane Guo, who gave a presentation on lumber market trends.
Some important recommendations were shared at the event regarding trade with China. Shipment documentation is being closely reviewed at ports of entry so it is important to ensure that documents are correct. Further, it was confirmed that while not explicitly stated in the new pinewood nematode regulations, transshipment is not allowed for pine wood that is covered under the changed regulations. Exporters are encouraged to do proper due diligence to confirm the necessary shipment details in advance, as it can be quite challenging to address issues after arrival. Generally, it was recommended that companies ensure they have the expertise on the ground to be able to resolve challenges that may arise, and to maintain close relations with local customers to assist with this. By following the necessary steps, it remains possible to ship lumber including pinewood into China from Canada, but the system has become a more difficult to navigate than in the past.
With more than 60 participants joining online from Vancouver, Shanghai, Beijing and Guangzhou, the event was a timely discussion on current affairs, with some considerations raised for the potential impact of increased lumber and log shipments coming into China from Russia. Industry representatives from Tolko and Western Forest Products shared some of their feedback as suppliers looking at global markets, and how Asia compares with current opportunities in North America. Canadian industry representatives reiterated their commitment to maintaining shipments of Canadian materials being sent to China, though current demand in the US presents a disparity in the prices available in each market.
After a review of the current situation for the export process, the team at CW China presented their outlooks for potential demand growth in China. Technical Specialist for CW China, Huang Qibin presented on the state of the Glue Laminated Timber (GLT) market in China, with the current number of high-quality GLT producers, and the quality certification program that CW China has developed and rolled out with the China Academy of Building Research (CABR).
The Senior Manager of Business Development of CW China, Alex Wu, presented on the current size of the market for furniture production in China, for both domestic consumption and global exports. As of 2020, there were 6,544 substantial furniture manufacturers in China, with a production value of more than 137 billion CAD (687.6 billion RMB). With wood furniture representing up to 60% of that market, there is a significant market opportunity to promote the use of softwood species such as Hemlock from Canada, with market research showing that hemlock furniture could be appealing to young families looking to purchase their first solid wood furniture pieces.
After the online program concluded, Eric Wong, Managing Director for CW China, held a roundtable discussion with consular trade officials and in-market representatives of Canadian exporters. He shared some plans for the plans CW China has for the 2022-23 fiscal year, as the strategy shifts towards more focused efforts to secure market share for Canadian products. Important aspects of the strategy include promoting the use of Wood Frame Construction (WFC) as a solution to reduce carbon emissions in constructions, and branding Canadian products for non-residential projects as well as for use in mass timber solutions, hybrid projects, prefabrication, and energy-efficient buildings. Strategies also include the branding of Canadian species for Wood in Manufacturing (WiM), as well as programs focused on product standards, certifications and specifications.
While the market for logs and lumbers is evolving based on demand growth in the market and changing circumstances for global trade, in 2019 the consumption of wood in China passed 600 million m3, and the market depended on imports to meet 53% of that demand. Exporters are advised to be diligent on preparing the necessary documentation for customs clearance, and coordinate with local importers to confirm ports that can receive direct shipments from Canada. Taking the necessary steps can help ensure ongoing access to an important market, and the team here at CW China is available to assist wherever possible.
Canadian lumber industry stakeholders can request a copy of the presentations from this event. To inquire, please contact [email protected]