China's log import market has witnessed a slowdown since the Chinese New Year, leading importers and exporters to travel and meet face-to-face with customers and suppliers. Travel restrictions were eased in China after February, allowing businesses to resume in-person interactions. However, the European species have remained the primary focus for importers, while African species have seen a decline in demand. Factors such as prices and quality have played a significant role in influencing these trends, making it challenging for importers to engage with suppliers on online platforms. Moreover, some Chinese factories have shifted their operations to countries like Vietnam, Thailand, and Malaysia due to the sluggish domestic market, resulting in a surplus of ex-stock that needs to be absorbed.
Impact on hardwood imports
European species like white oak logs, beech lumber/logs, and ash logs for flooring have continued to be imported by Chinese traders. However, the market for these species has been affected by two primary factors: prices and quality. Importers have noted that white oak log prices have remained high at 650 RMB per cubic meter, compared to the previous range of 500-550 RMB per cubic meter.
In contrast to the European hardwood species, the demand for softwoods like spruce and pine logs in the local Chinese market has been slow and low. Importers have reported a lack of purchases or sales for these species, primarily due to the sluggish domestic market conditions.
Shifting factories and ex-stock surplus
To navigate the challenging market conditions, some Chinese factories have decided to shift their operations to other countries such as Vietnam, Thailand, and Malaysia. These countries offer favorable business environments and potentially lower costs, attracting Chinese manufacturers seeking alternatives. As a result, local Chinese factories have accumulated a high volume of ex-stock that they need to digest. This surplus adds to the challenges faced by importers and exacerbates the sluggish market conditions within China.
China's log import market has experienced a decline following the Chinese New Year, prompting importers and exporters to resume face-to-face interactions with customers and suppliers. While European hardwood species like white oak logs, beech lumber/logs, and ash logs continue to be imported, factors such as high prices and subpar quality have affected their demand. Softwoods like spruce and pine logs have witnessed minimal demand due to a sluggish local market and poor quality concerns. Additionally, some Chinese factories have opted to shift their operations to neighboring countries, leading to an ex-stock surplus in China. These challenges have created a complex trading environment for importers, necessitating strategic decisions to adapt and thrive in the changing market conditions.