Global Softwood Market: China’s Demand Rise
Although the British Timber Trade Federation did not send a formal delegation to participate in this year’s International Conifers Conference (ISC), at this meeting hosted by TTF chairman Keith Fryer, some experts were invited to speak on the topic of the British market.
ISC observes and analyzes this world from the perspective of production and consumption. So it always gives a more general description than a detailed inspection of any market, but the overall theme is very important and worthy of attention.
This year, almost all markets in the world are very active. The most prominent performance is that China has guided the continuous rise of the market. China is the most populous country in the world. Wealth continues to grow, the middle class continues to grow, and the area of cities continues to expand, leading to an increase in the use of softwood. At the same time, China’s use of its forests has become more and more restrictive. Therefore, China not only imports from Russia, North America, and the Pacific Rim, but also imports timber from Europe more and more. Of course, markets in other Asian countries are also very active, but overall the Asian market is going downhill.
North America still maintains a strong momentum of development. The tariff-induced trade dispute between the United States and Canada in timber has provided an opportunity for European exporters.
Europe is also becoming more and more busy. The situation in various countries’ markets is different, but most of them are better than last year. It is expected that this state will continue to be maintained.
North Africa continues to be in a difficult position. Domestic chaos and turmoil and fiscal shortages have limited opportunities.
Producers continue to increase production. North America and Europe still dominate, Russia’s production is steadily increasing, and Russia’s investment in new capacity has increased significantly, especially in Siberia, with the aim of exporting directly to the Chinese market. There is also new investment in northwestern Russia.
From the British news, Britain has great uncertainty. The UK market is still strong. According to recent forecasts, GDP and construction spending will increase next year.
Consumption of softwood is expected to rise slightly. At the same time, the impact of Brexit and the devaluation of British pound on raw material costs is also worrying. Higher costs may stress the financial status of customers and limit their ability to execute some projects. According to the theory of risk balance, the situation in the United Kingdom next year may be lower than expected.
As far as the British timber industry is concerned, no matter what happens, the rest of the world will not lack the demand for timber. The UK is still the largest timber importer in Europe, so suppliers may continue to do business with the United Kingdom. However, considering the current low rate of return and the large number of uncertainties brought about by the Brexit process in the United Kingdom, we cannot expect to make a profit from doing business with the United Kingdom.