Impact of soaring Chinese demand for logs and lumber

China’s total wood demand is anticipated to keep growing from 250 million m3 in 2010 to 350 million m3 by 2015 (a conservative projected growth rate of 8% per year), possibly moving as high as 450 million m3 by 2020. The projected wood deficit (or the role of imports) is expected to grow from 100 million m3 to at least 150 million m3 in 2015 and up to 200 million m3 in 2020 (roundwood equivalent).Some interesting trends about China were presented at the WOOD MARKETS’ Global Wood Products Conference in May that helped explain the reasons for the projected dramatic growth of wood consumption in China, including the following:

• From 2005 to 2025, the McKinsey Global Institute estimates that China’s urban population will grow by 350 million people (an amount larger than today’s entire U.S. population);
• The urbanization movement in the next 15 years may lead to the building of 40 billion square feet of floor space in five million buildings, of which 50,000 are expected to be skyscrapers.
• By 2025, China is expected to have 221 cities with populations in excess of one million people (Europe has 35 today);
• China’s middle class is projected to double in the next 10 years (increasing by 350 million people);
• A new 100 square metre (1,000 square foot) apartment in Beijing can cost 30 times an average salary. The government has introduced policies to reduce housing-price increases to a maximum of 8%-10% per year.
• The Chinese government has announced that it will build 36 million affordable (low-income) housing units by 2015.

Chinese Customs’ statistics for Q1/11 indicate that log imports increased by 23% and lumber imports by 58.3% versus the first quarter of 2010. If this trend continues, lumber imports could rise to over 22 million m3 (9.3 billion bf net) in 2011 compared to 14.7 million m3 (6.2 billion bf, net) in 2010. At this rate of increase, there is potential for China to become the world’s largest importer of sawn lumber in 2011, surpassing the U.S.!

Source: International Wood Markets Group, http://www.woodmarkets.com/