Pulp Expansions Continue in China, Fueled by Record Chip Imports
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With the lack of sufficient quality and quantity of domestic wood fiber supply, new pulp mills in China are looking to expand importation of wood chips from plantation-rich countries in Southeast Asia to meet their growing fiber needs, according to the Wood Resource Quarterly (WRQ), Seattle, Wash., USA. In the third quarter, Vietnam, Thailand, and Indonesia were the major suppliers to China, together accounting for about 88% of all imports of hardwood chips.
Malaysia, Cambodia, Chile, and Brazil are a few of the recent and still small suppliers of hardwood chips to China, WRQ continues. These countries, which all supply wood chips from fast-growing Eucalyptus and Acacia plantations, are likely to expand their shipments in the coming years when Chinese pulp mills continue to diversify their supply sources.
China's wood chip imports in the first 10 months of 2011 already equal more than the total volume of imports in all of 2010. This year's imports will reach around 7 million tons, or 37% higher than in 2010. This upward trend is expected to continue in 2012 and 2013 because the Chinese pulp industry is in an expansion mode.
Pulp mills in China basically consume only hardwood fiber, so imports of softwood chips were negligible up until last year when a few shipments started to enter Chinese ports from Australia, Russia, the U.S., and New Zealand. This year, total softwood imports may reach just above 300,000 tons, or 4% of total chip imports.
The average value for China's imported wood chips has steadily increased, reaching $180/ton in the third quarter, or about 22% higher than the same quarter last year, WRQ points out. Vietnam is the lowest-cost supplier, while the cost for Eucalyptus chips from Australia were at the high-end in the third quarter. The costs of chips imported from the major supplying country Vietnam, have gone up almost 40% over the past two years. Vietnam is also shipping large chip volumes to Japanese pulp mills and, WRQ says, "it is interesting to note how the price discrepancy between chips exported to Japan and China has declined from almost $60/ton premium for Japanese-bound chips in 2009 to only $14/ton in the third quarter.
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