China softwood log inventory has risen steadily to 5.6m. Considering significant parts of China have been in lockdown, log offtake is still a relatively healthy 70k per day. Activity this May is similar to the last two Mays, but not as high as pre-Covid times when daily log offtake at ports ranged between 85-100k. The CFR price for A grade logs has ranged between 155 and 165 USD per m3\u00a0during May.<\/p>\n
The Chinese economy has been battered by Covid-19 lockdowns. The April Caixin China Manufacturing PMI fell to a 26-month low of 46.0. Both output and new orders fell at the second steepest pace since records began in 2004.\u00a0 Export orders were at the lowest level in two years.<\/p>\n
However, there are signs of recovery as lockdowns ease. In Shanghai, Covid-19 test requirements for people entering public places will not be required from June 1. In the last week of May, Chinese investors have snapped up shares of companies that are positioned to benefit from the resumption of normal economic activity. Local Shanghai officials have said they will accelerate approvals for property projects.<\/p>\n
In addition to this, the State Council (China\u2019s cabinet) has released a 140b yuan (21b USD) package of tax rebates and loans in an effort to stimulate the Chinese economy. This will increase log demand, although China is entering the hotter months when productivity usually slows down. There are promising signals for increased demand from August onwards.<\/p>\n
Overstocking at Taicang Port<\/strong><\/p>\n At present, the Covid control measures in Taicang City remain strict and timber transport is limited which has created storage headache for Taicang Port. It is reported that timber stocks have risen to about 1.7 million cubic metres, a record high. Shanghai and Taicang areas of the Yangtze River Delta have been heavily affected by the current Covid outbreak and are still not fully open.<\/p>\n As of mid May around 8,000 containers have been moved out from the port but more than 1,000 containers of North American timber are still stranded. It has been reported that timber is not allowed to be unloaded at Taicang Port and is being directed to other regional ports such as Qingdao and then barged back along the Yangtze River.<\/p>","protected":false},"excerpt":{"rendered":" China softwood log inventory has risen steadily to 5.6m. Considering significant parts of China have been in lockdown, log offtake is still a relatively healthy 70k per day. Activity this May is similar to the last two Mays, but not … Continue reading