Overview of Timber Import Growth in Q3 2024

In the third quarter of 2024, China's timber imports reached an impressive 15.52 million cubic meters, representing a 4% increase year-on-year. This growth reflects resilience in the timber sector despite persistent economic challenges, with total trade volume climbing 11% to $3.27 billion. Contributing to this surge, the average import unit price rose by 7% during the quarter.

Log Imports Report Strong Growth

China's log imports experienced substantial growth, amounting to 8.7 million cubic meters, marking a 5% year-on-year increase. The trade volume for logs also saw a significant rise, increasing by 10% to $1.52 billion. Notably, the average import price of logs increased by 5%, which indicates a strong and steady demand.

Softwood logs from New Zealand and South America continued to dominate stock at major ports; however, their share dropped to 71% from 77% since late September. Conversely, there was a notable surge in North American Douglas-fir and hemlock log imports, which rose remarkably by 37.5% to 480,000 cubic meters, constituting 18% of total inventories.

Sawn Timber Imports and Economic Significance

Sawn timber imports reached 6.81 million cubic meters in Q3 2024, with a modest increase of 2% compared to the same period last year. Notably, the trade volume for sawn timber expanded significantly, climbing by 11% to $1.75 billion, while the average import price for sawn timber escalated by 8%. These figures reflect persistent demand in the midst of rising costs, presenting opportunities for suppliers committed to navigating market volatility.

Inventory Challenges and Mixed Pricing Trends

As of early November, China's softwood log inventories stood at 2.72 million cubic meters, illustrating a 4% decrease since late September. Notably, while inventories of European spruce logs and specific North American species increased, volumes of radiata pine saw a sharp decline of nearly 11%. This dynamic indicates shifting inventory patterns that may affect future supply.

Market pricing trends remained mixed in October, with initial bulk price increases in Taicang and Lanshan reversing in the latter half of the month. Radiata pine log prices decreased by RMB 20/m³, while prices for logs used in panel production fell by RMB 40–50/m³. These adjustments reflect stock dispersion and active destocking by inventory holders, casting a shadow over market momentum.

Economic Outlook and Market Sentiment

Despite some relief from reduced inventories and softened shipping costs, market sentiment in China remains cautiously pessimistic, influenced by the prevailing economic environment. The Chinese government's introduction of recent stimulus measures, including a substantial $1.4 trillion debt package aimed at alleviating financial strains at the local government level, has not notably improved market confidence. With local government debt now standing at a staggering 117% of GDP, significant challenges persist.

The once-vibrant construction sector, essential for driving timber demand, continues to underperform. Although ongoing inventory reductions and steady off-take offer a glimmer of cautious optimism, overarching economic headwinds could hinder sustained growth in the timber market.

Conclusion

For wholesale timber buyers and suppliers, understanding these dynamics is crucial. The interplay between import growth and inventory challenges amidst an uncertain economic backdrop will influence purchasing strategies across Europe and the US. Monitoring these trends will be essential for maintaining a competitive edge in this complex landscape.