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China
Plywood exports soaring
China's
domestic plywood industry has developed strongly in recent years. Plywood
output was 7.28 million cubic metres in 1999 but in 2003 had jumped to
20.12 million cubic metres, up by 176%, 3 times more than that in 1999.
The overall trend in the trade of plywood is that exports are up
significantly while imports are falling annually.
China's Imports and Exports of
Plywood 2000 to 2004 (unit: cubic metre)
Value of China's Plywood
Imports and Exports 2000 to 2004 (unit: million US$)
The
above statistics reveal that China's plywood industry has become a mature
domestic industry and a globally influential sector with the following
features:
*Even
though plywood as a product has been manufactured for decades and is a
'traditional' panel product unlike, for example particleboard and MDF, the
pace of development of the plywood industry in China has outstripped the
growth in manufacture of other panel products.
This will only change when domestic consumers become more familiar
with the versatility, handling and enduse potentials of the other panel
products but this will take time. China has become the second largest
producer of plywood after the US and China's plywood exports reached 4.291
million cubic metres in 2004 making China one of the major plywood
exporting countries. Plywood exports were 5.5 times imports in 2004.
*
While the total value of plywood exports from China exceeded the value of
imports for the first time in 2001 the unit value of imported plywood remained higher than that for exports
reflecting quality differences between exports and imports.
*
Plywood exports began to rise sharply after 2002 and were US$1.245
billion in 2003 making the plywood industry a significant force in
national economic development and foreign currency earner.
*
In terms of market demand, raw material supply, production costs and
quality, the development of China's plywood is promising and has
tremendous potential say local analysts. The continuing growth of the
national economy is and will remain a strong driving force stimulating
demand for plywood for the future. Logs from plantations in Northen and
Eastern China as well as in the middle and lower reaches of the Yangtze
River watershed will be able to supply increasing quantities to the sector
to complement imported high grade hardwoods. The development of the
domestic plywood sector can take advantage of the hardworking and readily
trained workforce that will help to control production costs. In addition,
the quality of domestically made plywood has improved considerably in
recent years and Chinese made plywood has become competitive globally.
However,
local analysts think that there are some potential hurdles for the plywood
sector to address.
*
The supply of high quality logs for plywood will become increasingly more
to secure at reasonable cost. Countries with the forests producing high
quality plywood logs will have a growing advantage if the conditions in
those countries are conducive to investment in manufacturing. China's
plywood industry will depend on imports of high grade logs and the
industry will face growing pressure in securing supplies as national and
international pressure mounts to further protect natural forests. In
addition, many countries will likely further tighten control of log
exports to ensure local capacity is satisfied and this will be a
tremendous challenge to China's plywood industry in the future.
*
Currently, China's plywood can compete well in the international market
due to low production cost but this advantage is being weakened or may be
lost due to the increasing cost of oil which is affecting energy costs in
production and land transportation and shipping costs.
*
The international markets are becoming more demanding regarding wood
products and the consumer is becoming more and more aware of the issues
surrounding wood production. Also importing countries have strict health
and safety standards that must be met and there is also a growing demand
for proof of legality and certification in many countries and this will
present a challenge to all manufacturers. Every plywood producing country
has to address these issues to meet the requirement of the international
market.
*
Analysts also foresee growing protectionism in developed countries through
various forms of trade barriers and anti-dumping claims set up to protect
domestic industries in those countries especially as China's plywood
exports are forecast to increase further.
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