Global timber prices have risen sharply, “unprecedented”. Why are they so crazy? Will the upward trend continue in the future? What is the impact of the increase in timber prices on the industrial chain, will the performance of related companies fluctuate significantly? Liu Nengwen, director of the Timber Conservation Development Center of a central public institution affiliated to the State-owned Assets Supervision and Administration Commission, put forward his own views on this.
Liu Nengwen said that global timber prices have risen several times as much as “unprecedented.” The price increase is mainly due to the impact of the epidemic on supply and soaring logistics costs. Under the control of the epidemic, demand in China has recovered rapidly, and housing demand in the United States is strong, resulting in short-term supply and demand imbalance. This situation will be alleviated in the second half of the year. The reason is that the global timber resources are abundant, the processing capacity of major producing areas such as North America is gradually restored, and other materials replace natural forest wood.
Global timber prices have also spread to the Chinese market. Liu Nengwen said that China’s external dependence on timber exceeds 50%. In the long run, China’s timber import source has shifted (from Europe to Southeast Asia), and some materials have been replaced (plantation timber is partly replaced by natural forest timber and aluminum alloy plate replacement wood plywood) will make domestic wood supply stable and prices stable.
As for how the increase in wood prices affects the industry chain, Liu Nengwen frankly said that it has a greater impact on the wood industry. Small and micro enterprises bear the brunt, and even individual companies have been forced to shut down, but the overall operation of the industry is still stable. However, there are also companies that benefit from the price increase, such as Pingtan Development, which is mainly engaged in the export of wood products, and Kangxin New Materials, which is mainly engaged in container flooring, both have a significant increase in net profit in the first quarter. In addition, furniture companies that are mainly engaged in export trade should have very good performance this year.
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Post time: Mar-28-2022