{"id":77587,"date":"2019-06-12T09:09:48","date_gmt":"2019-06-12T09:09:48","guid":{"rendered":"https:\/\/tin.happy-projects.ro\/china-boom-in-timber-delivered-via-railway\/"},"modified":"2025-09-19T08:50:56","modified_gmt":"2025-09-19T08:50:56","slug":"china-boom-in-timber-delivered-via-railway","status":"publish","type":"post","link":"https:\/\/www.timberindustrynews.com\/ro\/china-boom-in-timber-delivered-via-railway\/","title":{"rendered":"China: Boom in timber delivered via railway"},"content":{"rendered":"
\n

How will the competition between railway transported timber and port timber affect the market structure in China? Some market participants say that the future wood processing of timber coming to China through ports will be reduced by at least 50%! And that's not an alarmist point of view. This is the general trend noticed in the past years.<\/strong><\/em><\/p>\n

First, the global timber major suppliers are changing their national policies regarding exports of logs. Russia, Ukraine and other countries plan to ban large-scale log exports and promote domestic wood processing!<\/p>\n

Second, the Russian wood exports which rely\u00a0on the Belt and Road policy directly reach domestic mainstream cities. Currently, there is direct access to Heilongjiang Harbin, Shaanxi Xi'an, Shanxi Yuci, Henan Zhengzhou, Jiangsu Xuzhou, Shandong Zibo, Gansu Lanzhou, Wuwei, Qinghai Xining, Inner Mongolia Wulanchabu, Hunan Changsha, Hubei Wuhan, Guangdong Dongguan, Fujian Xiamen, Jiangxi Ganzhou, Zhejiang Hangzhou, Jiangsu Xuzhou, Sichuan Chengdu, Chongqing, etc., almost directly covering most of China!<\/span><\/p>\n

Third, the price of Russian timber is low, and the quality is extremely high. Once the customer develops the habit of using goods, it is difficult to choose the wood coming from ports, and the port wood has to achieve the same processing quality. The cost is too high, plus the Chinese\u00a0domestic environmental protection policy increases operating costs, thus making the situation even more difficult.<\/p>\n

Fourth, supply chain finance is becoming more and more mature. With the mature development of supply chain finance, most of the projects will be large-scale, the platform will be systematic, and the scale will be funded. The most worrying issue is the quality. Chinese imports of Uruguayan pine, Torch pine, Caribbean pine, Araucaria, radiata pine, Ozon, and so on, will be largely eliminated, except for a small number of individual importers which will continue to import.<\/p>\n

Fifth, the Chinese lumber importers seem to be satisfied with imports of finished hemlock, plus pine, spruce, red pine, Finnish pine, Ukrainian pine, etc. And if now the ratio of imports of lumber vs. logs is of 20\/80% this is about to change to 80\/20% taking into consideration the rising prices of imported logs.<\/p>\n

Boom in Russian softwood lumber train deliveries to China supported by the Belt & Road Initiative<\/strong><\/p>\n

According to trade data sourced from China Customs, China imported 36.8 million cubic metres of lumber in 2018, a slight decline of 1.6 percent from 2017. Of total lumber imports, softwood lumber accounted for 24.9 million cubic metres, a slight decrease of one percent compared to 2017.<\/p>\n

However, Russian softwood lumber exports to China were a whopping 15.65 million cubic metres in 2018, an increase of 10 percent compared with 2017. This is more than double the exports in 2014 and now represents a 63% share of the China market. Clearly, China\u2019s \u201cBelt & Road Initiative\u201d (BRI) was partly responsible for the increase in softwood lumber volumes from Russia to China.<\/p>\n

The Belt & Road Initiative is a massive program that includes many large-scale infrastructure projects with other countries. Proposed by Chinese President Xi Jinping in 2013, the main purpose was to shift overproduction to inland regions, taking advantage of China\u2019s lower labor costs and capacity. At the same time, it\u2019s designed to improve the supply chains of key suppliers and to crucial export markets, improving the competitiveness of Chinese goods and raw materials.<\/p>\n

\"\"<\/a>In 2018, the number of operational China-Europe block trains had exceeded 6,363 (vs. 3,678 in 2017), running between 56 Chinese cities and 49 cities in 15 different European countries. Among these, 2,690 were return trains that shipped from Europe to China, a significant increase of 111% from 2017.<\/p>\n

Currently, about 50 to 60 percent of total container transportation costs of China-Europe block trains are being paid through local government subsidies since the regular cost is still very high. This is partly due to the lower number of \u201creturn-block trains\u201d (from Europe to China) versus \u201cgo-block trains\u201d (from China to Europe). Therefore, the development of the return train is one of the key factors that will determine whether China-Europe block trains can finally operate without government subsidies. Russian lumber has been one of the most important products shipped on the return-block trains. From the central government\u2019s plan, the subsidy mechanism is expected to be canceled in 2020.<\/p>\n

The following map highlights major supplying cities in Russia along the rail route to China. The green dots represent major rail hubs in Russia and the red dots are the major inland cities in China.<\/p>\n

Every week from Russia Siberia (Irkutsk, Krasnoyarsk and Tomsk), there are regular block trains to central Chinese cities such as Chengdu, Chongqing, Xi\u2019an and Wuhan. There are also less frequent trains going to Linyi and Ganzhou. Total transportation costs paid by Chinese importers vary from $1,800 \u2013 $3,000 per 40\u2019 container, which is faster, and also cheaper than (or the same with) shipping from Russia to China by regular trains followed by inland transportation.<\/p>\n

Although no exact number has been released, block-train operating companies estimate there were\u00a0\"\"<\/a>around 600 return-block trains, with around 1.2 million cubic meters of lumber shipped to China in 2018. Most of it was from Russia and some quantity was shipped from Finland and Sweden. Chengdu, Chongqing and Xi\u2019an were three of the main inland cities for return block trains with Russian lumber in 2018, representing more than 80% of the total lumber volume.<\/p>\n

As a result of the BRI, there is more Chinese investment in Russia\u2019s forest and wood industries, both from state-owned and private sector companies. Furthermore, it seems that more recent investment is being focused on remanufactured products with more kiln-dried lumber and profiled products being sent to markets in China. Value-added and kiln-dried products can be shipped much further into China and at lower costs compared to heavier green lumber.<\/p>\n<\/div>\n

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How will the competition between railway transported timber and port timber affect the market structure in China? 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