China Surpasses Japan to Become World's Largest Importer of Hardwood Chips
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Growing demand for paper in China has not only forced the country to import large volumes of pulp to supply the country's paper machines, but also resulted in investments in new pulp production within China, according to the Wood Resource Quarterly (WRQ), Seattle, Wash., USA. Because of a lack of competitively priced wood fiber in China, the two pulp companies with the largest pulp mills in the country, Asia Pacific Resources International Ltd (APRIL) and Asia Pulp and Paper (APP), are procuring much of their wood fiber needs from out-of-country sources. As a consequence, importation of wood chips to China has surged the past few years.
In just five years, China's import value for wood chips has increased from $180 million dollars in 2008 to $1.3 billion dollars in 2012. This year the estimated import value could be close to 1.5 billion dollars, according the WRQ.
It was only been a matter of time for China to become the largest importer of hardwood chips in the world. In the second quarter of this year, China surpassed Japan with the record importation of almost 2.4 million cubic meters of chips.
Although there have been sporadic shipments of chips from Latin America, Malaysia, and South Africa during 2012 and 2013, there are really only four countries that have been supplying China with wood fiber the past few years. Those countries are Australia, Indonesia, Thailand, and Vietnam, with Vietnam accounting for more than half of the total import volume.
Another interesting development is that the average cost of imported wood chips has declined by almost 6% from the second quarter of 2012 to the second quarter of 2013, WRQ reports. The biggest price decline has been in Australian chips, which have fallen more than 11% in one year. Because of this price drop, in the second quarter of this year, Australia exported its highest quarterly volume to China since 2010.
With continued plans to expand domestic pulp manufacturing in China, it can be expected that shipments of wood chips, both softwood and hardwood, is going to increase in the coming years, WRQ says.
More information is available online.
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