What is the special significance of RMB exchange rate “breaking 7” for timber producers?

What is the special significance of RMB exchange rate “breaking 7” for timber producers?

Yesterday, the offshore US dollar fell below the seven-point mark against the RMB for the first time in 2019.

What impact does RMB break 7 have on timber market

In the first half of 2019, the domestic North American timber market was not very peaceful. On the one hand, the Sino-US trade war and the continued devaluation of the RMB have caused the import cost of North American timber to rise substantially and the import cycle to prolong greatly. On the other hand, the domestic market economy situation is not optimistic. In a cautious mood, the demand for North American timber in the downstream market is shrinking, and timber prices are difficult to rise.

The Sino-US Trade War has hit the North American timber market hard

Continuous depreciation of RMB pushes up the cost of timber import in North America

Lower market demand is weak, North American timber prices cannot rise

North American timber is hard to say better in the second half of the year

It is based on this situation that the market is not optimistic in the future, and the holders dare not rush to increase prices. Even after the off-season, Timber Merchants still hold a pessimistic attitude, generally believing that the second half of 2019 market is less than the same period last year. Therefore, although the depreciation of RMB brings about naked cost increase to the market, the unoptimistic judgment of the future market trend aggravates the timber merchants’psychology of “not daring to rise”.

However, the short-term market downturn does not mean forever. North American timber has a huge competitive advantage in the market. I believe that with the combination of sound monetary policy and active fiscal policy, the future North American timber market may return to its former glory.

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