The flow of lumber, logs and pulp from the US to China has fallen sharply since the US government initiated tariffs on Chinese imports to the US in May of 2018. In the first four months of 2019, China's imports of US forest products were down 43% from the same period in 2018.
SEATTLE, July 1, 2019 /PRNewswire/ -- The trade war between the US and China has not only resulted in higher costs for US consumers on home appliances, electronics, apparel, footwear, and industrial machinery, but has also impacted US exporters of forest products to China. China's economy slowed during 2018 and early 2019, causing the total value of imported wood pulp, lumber and logs to decline by just over 10% from the first four months of 2018 to the same period in 2019, reports the WRQ. Simultaneously, forest product imports from the US fell by almost 42% in value.
From January to April, 2019, China imported logs, softwood lumber, and pulp from the US collectively valued at 600 million dollars. This is down from $1.03 billion dollars' worth of forest products imported during the same period in 2018. The biggest declines in import value of US forest products from the 1Q/18 to the 1Q/19 have been those of wood pulp and hardwood logs, falling $220 million and $110 million, respectively.
With forest product imports from the US deteriorating and American wood product exporters losing market shares in the Chinese market, imports from other countries, including Canada and Russia, have fallen less or even expanded the past year. While the US market share for forest products imports has fallen by 35% from the first four months of 2018 to the same period in 2019, Canada's and Russia's shares have gone up by 12% and 4%, respectively.
Supply of softwood logs and lumber from Canada, in particular, has increased in 2019, with import volumes of logs increasing 25% year-over-year, and lumber imports increasing 54% in early 2019 as compared to early 2018. In addition, there has also been a rise in shipments of both logs and lumber from Europe since the trade conflict started in the summer of 2018.
Even if the trade negotiations between the US and China result in lower or eliminated tariffs in the future, the new supply sources that Chinese forest products importers have developed during the on-going trade dispute will likely remain, permanently changing historic trade flows to China.
Global lumber, sawlog and pulpwood market reporting is included in the 56-page quarterly publication, the Wood Resource Quarterly (WRQ). The report, which was established in 1988 and has subscribers in over 30 countries, tracks sawlog, pulpwood, wood chip, lumber and pellet prices, and trade and market developments in most key regions around the world. Please visit our website WoodPrices.com to learn more about our subscription services.
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