{"id":81024,"date":"2021-07-29T10:46:19","date_gmt":"2021-07-29T10:46:19","guid":{"rendered":"https:\/\/tin.happy-projects.ro\/log-demand-china-expected-drop-taicang-sawmills-forced-relocate\/"},"modified":"2025-09-19T08:55:52","modified_gmt":"2025-09-19T08:55:52","slug":"log-demand-china-expected-drop-taicang-sawmills-forced-relocate","status":"publish","type":"post","link":"https:\/\/www.timberindustrynews.com\/ro\/log-demand-china-expected-drop-taicang-sawmills-forced-relocate\/","title":{"rendered":"Log demand in China expected to drop as Taicang sawmills are forced to relocate"},"content":{"rendered":"

Softwood log inventory in China has risen to about 5.5m m3 and daily port off-take has dropped to around 60k m3 per day.<\/em><\/p>\n

While this drop in offtake was expected due to the hot sticky weather in China, the offtake over the last three years has dropped to only about 75k per day in July. (Last year was an anomaly due to the severe floods in China). In each of these years demand and log prices increased through quarter 4.<\/p>\n

The price for A grade logs was in the mid 190\u2019s range for June and early July shipments. There is now a standoff between the log exporters and Chinese log buyers with LC\u2019s not signed at 185 USD per m3\u00a0for A grade.<\/p>\n

Many log processing facilities in Taicang will have to close or relocate after the government with very little warning, effected regulation in early July that will restrict sawmilling to specific identified industrial districts. Initial estimates are this will reduce milling capacity by about 50%.<\/p>\n

Taicang was China\u2019s second largest port for softwood imports and received about 20% of China\u2019s total softwood imports. Taicang is only just over 50km north-west of Shanghai so the regulations are likely to be a combination of government wanting to repurpose the land as well as reduce pollution. This land will most likely be repurposed for housing or higher tech companies. (Interestingly, Taicang is the hub for over 250 German companies in China).<\/p>\n

We have seen similar occurrences in China previously and these have disrupted the log market in the short-term but have had no long-term effect. In 2018 under the Governments \u201cThree Year Plan on Defending the Blue Sky<\/em>\u201d, over 3,000 wood-based panel enterprises in Hebei Province were told to stop production and undertake refurbishment or relocate. In 2019, Shenzhen\u2019s\u2019 local government decided to move the sawmills away to utilise the land for other industries.<\/p>\n

Log demand in China usually ramps up after the golden holiday week at the start of October. At the same time there will still likely be constrained supply for several reasons:<\/p>\n