Europe and Russia fuel modest recovery in Chinese softwood lumber imports

Chinese softwood lumber imports increased 9% in the first quarter compared to the same three months in 2022

The modest gain reversed a steep downward trend that has persisted in recent years and provided support for predictions among some analysts that overall demand in China would strengthen this year as the country’s ailing real estate sector recovers.

Imports climbed to 4.42 million cubic meters through March, up from 4.06 million cubic meters in the first quarter last year, according to figures from Trade Data Monitor. Shipments from foreign suppliers fell 10% in 2022 and plunged 23% in 2021 compared to 2020.

Traders remain hopeful about Chinese real estate

The rate of decline in Chinese imports slowed throughout 2022. Shipments reached 4.7 million cubic meters in the fourth quarter last year, marking the fourth consecutive quarterly hike and the highest three-month total since 2021. Seasonal factors, including Chinese New Year observances, contributed to the decline in first-quarter shipments compared to the fourth quarter of 2022.

Many traders remain hopeful that China’s real estate sector will regain its stride as the year progresses. Government measures designed to stimulate real estate investment are expected to be fully implemented in the second half.

Despite the signs of recovery in the Chinese import market, North American suppliers continued to lose ground. Shipments from Canada plunged to 311,402 cubic meters, down 25% from a year ago. Deliveries from the US fell 13% to 29,172 cubic meters.

North America’s share of the Chinese import market faded to 8% compared to 11% in the first quarter of 2022. US and Canadian species have lost market share at a steady rate in recent years, with Europe and Russia becoming the dominant suppliers.

Chinese imports from Europe surged to 1.23 million cubic meters in the first quarter, up 41% compared to a year ago. European producers have relied heavily on export markets to compensate for weak domestic demand in 2023.

Russian exports to China reached 2.59 million cubic meters through March. Russia supplies accounted for 59% of total Chinese imports in the first quarter. However, shipment volumes posted a relatively modest 2% gain compared to the first three months of 2022. Russia’s share of the Chinese import market was 63% in the first quarter last year.

China is an export target for Russia

China is expected to remain a primary target for Russian exporters because many other countries have imposed economic sanctions against Russia in response to the Ukraine war.

Further, North American suppliers are likely to face rising competition from other producers worldwide if overall Chinese demand continues to recover. Imports from Chile jumped 88% in the first quarter to 101,670 cubic meters. Shipments from New Zealand more than doubled. Pine from those two countries will compete directly with US Southern Pine.

An influx of softwood logs from Australia added to the supply mix in recent weeks. A resolution to a longstanding trade war between China and Australia allowed Australian log shipments to resume in China. Historically, Australia is among the world’s largest log suppliers to China.

Stay ahead of wood products market changes by joining your peers in subscribing to the Random Lengths weekly reportSpeak to our team and find out more about our price products, forecasts and how Fastmarkets can help your business.

What to read next
Pulp price rally in China  With the backdrop of a pulp price recovery taking shape in China, leading pulp and paper industry participants met last week in London, with upside risk present in the market for the first time in over a year. The strong seasonal bump for demand in China in the second half […]
Multifamily housing starts show some sign of life in late 2023, but the overall picture shows a different trend when compared to single-family
Despite slower population growth and lower household formation rates, there remains a shortfall in the housing market, particularly for starter homes in North America
While daily crude steel production stood at 2 million tonnes in mid-October, a 1.25% decrease from the previous year according to data published by China’s Iron and Steel Association (CISA), overall production has remained relatively firm following a strong first half of 2023. With no clear indications of a rebound in downstream steel prices in […]
Fastmarkets hosted an insightful webinar on the future of southern yellow pine and its potential impact on the North American lumber industry. For those who missed it, here's a breakdown of the key takeaways
China’s premium for copper cathode imports increased after the country’s golden week holiday from September 29 to October, supported amid favorable import conditions, while the premium in the US copper market came under pressure due to excess supply, sources said