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Log demand in China has increased steadily while log stocks have decreased slightly. The fluctuating prices are due to effusive sentiment that the construction market was going to increase significantly. When the log demand didn\u2019t increase as much as expected, log buyers and sellers started panicking.<\/p>\n
China softwood log inventory has dropped to 3.2-3.3m m3 with radiata accounting for about 2.9m m3. The stimulation packages announced by the Chinese government has not increased construction activity in China. Port off-take has remained steady at just over 70k per day.<\/p>\n
The biggest issue for log buyers and construction companies in China is cashflow constraints.<\/p>\n
The CFR price for A grade radiata logs in China has dropped to 120-125 USD. May expected price ranges are 115-20 USD for A grade. Buyers that were buying logs at too high a price earlier in the year now aim to buy logs at a much lower price to recover their losses. More than ever the importance of strong relationships and trust individual log sellers have with log buyers allows for a more stable ride through this fluctuation.<\/p>\n
The China Caixin manufacturing PMI dropped to 50.0 in March. The index is now balancing on the significant level of 50. (A reading above 50 indicates an expansion of the manufacturing sector). This result shows the growing doubt about the strength and robustness of China\u2019s economic recovery.<\/p>\n