The cost implications of rising Russian log export duties are increasingly having an impact on China, delegates at the China International Wood Products Summit (IMWG) have heard.
The Qingdao conference, organised by International Wood Markets Group, heard that China is looking to increase domestic sourcing of wood to negate the increased costs.
IMWG vice-president Gerry Van Leeuwen said almost 70% of China’s 32 million m³ of log imports were currently sourced from Russia.
“This is pushing Chinese manufacturers to explore how plantation wood can be integrated [with technology] into their operations, to replace more expensive imported wood.”
Plantation wood is rapidly growing in significance – by 2010, 70% of domestic commercial-purpose timber will be supplied by Chinese plantations.
The summit also heard that Chinese wood product exporters are diversifying both in market and product in a bid to maintain their rapid growth, with wood exports growing by 44% in the first half of 2007. But rising raw material, energy and freight costs, currency appreciation, decline of VAT rebates, as well as lower prices and volumes were biting.
Operating margins have been squeezed to about 10%.
