Subject: FEA
Australia's role as a hardwood chip supplier to China and Japan has dramatically diminished in 2020, with shipments having fallen by 38% from last year
STOCKHOLM, Dec. 29, 2020 /PRNewswire/ -- Hardwood chip exports from Australia fell 14% from 2018 to 2019, the first y-o-y decline since 2012. Total exports equaled 5.7 million odmt, of which 63% was destined for China. Shipments in 2020 have continued to slide, with volumes during the first nine months being 38% lower than during the same period in 2019. In the 3Q/20, the estimated export volume reached its lowest level in almost seven years (see chart).
Australia's wood chip exports to pulpmills in China and Japan fell by 61% from their record-high levels in the 4Q/18 to the 3Q/20, and Australia's share of total imports to the two countries declined from about 35% to 12% over the same period. Vietnam has increased its market share to almost 60% in the third quarter this year, the highest level in more than a decade. Other countries that have supplied hardwood fiber to Chinese pulpmills in 2020 include Chile, Thailand, Brazil, South Africa, Malaysia, and Canada. This group of smaller suppliers accounted for 21% of total imports in the 3Q/20, a slightly higher share than in the 3Q/19.
Not only has Australia's role in the Asian chip market diminished, market prices for the country's wood chips also declined in 2020. The average export price in the 3Q/20 was US$150/odmt, down four percent from the 3Q/19, according to Customs data. However, a weakening Australian dollar has benefited chip exporters, with prices in the local currency reaching record highs in 2020.
China has reduced importation of high-density and high-cost hardwood chips from Australia the past two years and mostly substituted that furnish with lower-density and lower-cost chips from Vietnam, according to the WRQ. The price premium for wood chips from Australia compared to Vietnam has been about $60/odmt in 2020, a doubling from five years ago.
Are you interested in wood products market information from around the world? The Wood Resource Quarterly (WRQ) is a 70-page report, established in 1988 with subscribers in over 30 countries. The publication tracks prices for sawlog, pulpwood, lumber & pellets worldwide and reports on trade and wood market developments in most key regions worldwide. For more insights on the latest international forest product market trends, please go to www.WoodPrices.com
Wood Resources International LLC
Hakan Ekstrom
[email protected]
www.woodprices.com
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SOURCE Wood Resources International LLC
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