Price hike brings downturn in solid wood flooring
Asia Observatory

12 September 2007

Price hike brings downturn in solid wood flooring

Chinese solid wood flooring manufacturers have increased their prices in response to an increase in raw material costs, causing complaints from retailers and consumers.
South American sawn timber prices increased 30% during the year, and price rises are expected to continue in the near term. Retailers and consumers are complaining about price hikes, since business in China is slowing.
Coastal areas host most of China’s furniture production base China Wood Monthly reports that the concentration of furniture production areas along the coasts has been growing. These areas have been increasing their market shares, growing to 92.6% of total exports in 2005.
Guangdong, a fast increasing coastal producer area, Fujian and Zhejiang make up 78.55% of the country’s total furniture output.
State Council sets up China’s national forestry industry association On August 20, the China State Council established the China Forestry Industry Association. The national association is a non-profit social group managed by the State Forestry Administration and will play an active role in standardizing industry management, improving industry planning, promoting orderly competition and serving the forestry industry. Additionally, the association will also endeavor to improve recognition and competitive strength of China’s wood products market and move its forest industry in line with international practices. The establishment of the association marks an important milestone in the development of China’s forestry industry. The total output value of China’s forestry industry topped RMB1 trillion and the total international trade value of China’s forestry industry was RMB47 billion in 2006, nearly three and two times higher than in 2000, respectively. The total output value of China’s forestry industry is expected to be about RMB1.5 trillion in 2007.
Shandong Port boosts plywood exports dramatically During the first half of 2007, Qingdao Customs reported that plywood exports through Shandong Port rose to 1.47 million m³, valued at US$460 million, up 41% in volume and 78% in value from the same period in 2006. The average price for exported plywood was US$310.4 per cubic meter, up 27%.
The causes of the price rise were record high prices for exported plywood through the port, which exceeded US$300 per m³ for six consecutive months and broke US$317 per m³ in June. The main export markets of the US, EU and ASEAN countries accounted for 69% of plywood exports through the port. Statistically, exports from enterprises grew across the board during the first half of 2007. Private enterprises rose 40% to 969,000 m³, stateowned enterprises rose 42% to 359,000 m³, foreign traders grew 49% to 111,000 m³, and collective enterprises increased 29% to 32,000 m³.
Imports through Heihe Port surge across the board Log imports through Heihe Port were 2,043 batches, 63,500 m³ and worth US$3.54 million during the first half of 2007. The imports resulted in increases by 28.7% in batch, 33.4% in volume and 42.9% in value from the same period in 2006. The main timber species imported were birch and larch. Although Russia had implemented its higher log export tariff, log imports through Heihe Port had not yet been impacted.