Long-standing decline in Chinese softwood lumber imports is moderated in 2023

Chinese softwood lumber imports declined 10% in 2022, sustaining the downward trend that has persisted in recent years. However, prospects for at least a modest rebound have appeared on the horizon in early 2023, according to many industry observers.

Shipments to China from foreign suppliers fell to 17.3 million cubic meters last year, down from 19.2 million cubic meters in 2021, according to statistics from Trade Data Monitor. Last year’s rate of decline slowed dramatically from the 23% plunge in 2021 compared to 2020.

North American exports to China sustained a steep downward trend that has lingered for more than a decade. Canadian shipments fell to 1.3 million cubic meters, down 20% from the previous year. US exports plummeted 45% to 105,640 cubic meters.

Modest gains in the fourth quarter and a faster-than-expected start to 2023 have given exporters some reason to believe Chinese demand may have found a bottom last year. Shipments to China from suppliers worldwide reached 4.7 million cubic meters in the fourth quarter, marking the fourth consecutive quarterly hike and the highest three-month total since the third quarter of 2021.

Further, many traders noted that sales to China gained momentum in February as the industry returned from New Year holiday observances. However, North American exporters face an uphill battle to capture a share of any potential growth in the Chinese market this year. Competition from Russia and Europe appears unrelenting.

Chinese imports from Russia slipped a relatively modest 8% last year, falling to 11.9 million cubic meters. The chart shows Russian exports to China increased in the second and third quarters after the Ukraine war started in February.

China became an even more critical market for Russian exporters after many countries imposed economic sanctions in response to the invasion of Ukraine.

Russia’s share of the Chinese import market reached 69% last year, up from 67% in 2021. Europe’s share of the Chinese import market climbed to 18% last year compared to 17% a year earlier. North America’s share fell to 8%, down from 9% in 2021. Traders note that those trends will be difficult to reverse in 2023, even if overall Chinese demand strengthens as many hope.

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