Outlook for Woodchip Imports in Chinajopp.or.jp/event/pdf/%C3%E6%B9%F1%A4%CB%A4%AA%A4%B1%A4%EB...As...
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Outlook for Woodchip Imports in China Bob Flynn Director, International Timber, RISI JOPP Seminar, Tokyo, June11, 2013
Transcript of Outlook for Woodchip Imports in Chinajopp.or.jp/event/pdf/%C3%E6%B9%F1%A4%CB%A4%AA%A4%B1%A4%EB...As...
Outlook for Woodchip Imports in China
Bob Flynn
Director, International Timber, RISI
JOPP Seminar, Tokyo, June11, 2013
As recently as 2003, China was the fourth largest supplier of
hardwood chips to Japan; but since 2006 China has been a
net woodchip importer, and is now the 2nd largest chip importer
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China: Imports and Exports of Hardwood Chips
Imports Exports
Agenda
• Why does China need to import woodchips?
– World’s biggest producer of paper and paperboard
– Growing domestic pulp production
– Shortage of domestic timber resources
• Historical trend in woodchip imports in China
– Hardwood
– Softwood
• Outlook for woodchip imports in China
China has become the world’s largest paper and paperboard
producer; 70% of furnish is recovered paper, but consumption
of wood pulp has also been increasing rapidly
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China: Fiber Consumption for Paper and Paperboard Production
Non-Wood Pulp
Wood Pulp
Recovered Paper
What’s ahead for China’s paper industry?
• China’s 12th Five-year Plan provides “strong guidance”
for the paper industry:
– Primary focus on domestic market, rather than producing for
export.
– “Forest-Paper” integration includes acquiring forest resources
outside of China.
– Recovered paper collection and consumption is encouraged.
– Industry consolidation to increase.
– Effluent reduction, energy conservation and mill closures.
China’s growth in per capita income will mean
rising consumption of paper--- although
electronic media will have an impact
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Per Capita GDP in US Dollars
Graphic Paper Consumption and Per Capita Real GDP
Japan
South Korea
China
Source: RISI,
China Pulp
Market: A
Comprehensive
Analysis and
Outlook, 2012
RISI projects that newsprint production and
demand in China will decrease over the next
decade
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China's Newsprint Production and Demand Forecast, 2012-2022
Production Demand
Source: RISI,
China Pulp
Market: A
Comprehensive
Analysis and
Outlook, 2012
P&W paper production will increase, but net
exports will decline as domestic consumption
increases
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China's Printing & Writing Paper Forecast, Million tonnes
Net Exports (Rt) Production (L) Demand (L)
Source: RISI,
China Pulp
Market: A
Comprehensive
Analysis and
Outlook, 2012
Containerboard will be one of the fastest
growing segments of the industry, with
consumption keeping pace with production
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Chinese Total Containerboard Consumption and Production
Consumption Production
Source: RISI, China
Pulp Market: A
Comprehensive
Analysis and
Outlook, 2012
Boxboard production seems set to expand
faster than domestic consumption, so net
exports will increase
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Chinese Total Boxboard Consumption and Production
Consumption Production
Source: RISI,
China Pulp
Market: A
Comprehensive
Analysis and
Outlook, 2012
Tissue is a smaller segment, but rapidly
growing in China- which will become the
world’s leading consumer
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China Becomes the Leading Consumer of Tissue
Western Europe North America China
Source: RISI, China
Pulp Market: A
Comprehensive
Analysis and
Outlook, 2012
China’s imports of wood pulp have been growing rapidly, but
domestic production has also been increasing, with output
growing 8% annually since 2004, to more than 9 million tonnes
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China: Production and Imports of Wood Pulp
Imports Production
But imports of woodchips have been growing much faster
than pulp imports, increasing 49% annually since 2004
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China: Index of Pulp Production and Woodchip Imports
Pulp Production
Woodchip Imports
China’s area of eucalyptus plantations doubled between
2006 and 2012 – but will it be enough to meet demand?
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China: Area of Eucalyptus Plantations
Other
Guangxi
Some eucalyptus plantations in China are relatively
high quality
Stora Enso has helped to
introduce high-quality
eucalyptus forestry to
China, using modern
technology from the first
step.
While most harvesting in
China is still done by hand,
Stora is developing some
plantations for mechanical
harvesting.
But other plantations are more difficult…
Plantations are often
located on steep slopes,
with poor road connections
to markets.
Agriculture still has priority
in China, with forest
plantations stuck with less
productive sites.
And some plantations are really bad…
Even some flat ground may not be
well suited for growing trees, due
to very infertile soils, lack of
rainfall, etc.
Many Chinese companies think
"cheaper is better", but with
eucalyptus this can be a problem.
Eucalyptus in China has a problem with frost, and may also
have future problems with pests and disease due to very
narrow genetic base
Frost damage to a young
plantation
Bacterial wilt damage to a
Eucalyptus plantation
Pulpwood is expensive in China, as even very small (8cm+)
eucalyptus logs like these are used for veneer, and can cost
US$100/cubic meter or more
The vast majority of China’s woodchip imports have
been hardwood, not softwood
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China Woodchip Imports
Hardwood
Softwood
In January-April
2013,
• Imports of
hardwood chips
are 17% higher
than in 2012.
• Imports of
softwood chips
are 122% higher
than in 2012.
Nearly 90% of China’s hardwood chips are from
Southeast Asia
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China: Imports of Hardwood Chips
Other Australia
Indonesia Thailand
Vietnam
Change in
imports by
source in
January-April
2013 vs. 2012: • Vietnam + 42%
• Thailand - 17%
• Indonesia + 8%
• Australia + 70%
• Other - 36%
In some months, China’s imports of
hardwood chips have already exceeded the
volume imported in Japan
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Hardwood Chip Imports in Japan and China, 2008 - April 2013
China Japan
Australia has been the primary supplier of
softwood chips to China, although the USA
would also like to sell a lot more to China
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China's Softwood Chip Imports, 2008-2012Thousand BDMT
Australia Russia Brazil
Fiji N Zealand USA
Market shares in
January-April 2013: • Australia 72%
• Fiji 10%
• USA 9%
• Russia 8%
China’s imports of softwood chips have been
higher in 2013, but will likely level out in
second half
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Softwood Chip Imports in Asia, January 2009-April 2013
China Japan
75% of China’s hardwood chip imports in 2012 went to just
two mills: APRIL at Rizhao and APP on Hainan Island
But other hardwood chip importers
have been increasing volumes also
In January-March 2013, market share of “Others” = 30%, up from 25% in 2012
Softwood chip imports have gone to just a few mills,
with little change over time
China’s Hardwood Chip Import Price: Prices
higher in eastern China (Shandong province)
due mostly to higher freight
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Hardwood Chip Price Index, 2009-March 2013 (CIF)
East China
South China
Source: RISI
International
Pulpwood Trade
Review 2013
Hardwood Chip Price in Rizhao Australian suppliers tried hard to keep their price down, but still higher
than SE Asian suppliers
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IF
Hardwood Chip Price in Rizhao, 2009 - March 2013
Vietnam
Thailand
Indonesia
Australia
Source: RISI
International
Pulpwood Trade
Review 2013
Project List Paper Grade Pulp
Project Allocation Type
New
Capacity
Purposed Start
Date
APP Qinzhou, Guangxi MEC 350 Jan, 2013
Bohui Dafeng, Jiangsu MEC 400 Q2, 2013
MCC Yinhe Linqing, Shandong MEC 70 early 2013
Xinya Henan MEC 250 2013
Jindaxing Guangxi BHK 170 2013
Lee & Man Wuzhou, Guangxi DIS 103 2013
Oji Paper Nantong, Jiangsu BHK 700 2013
Longjiangfu Heilongjiang UKP 340 Q4, 2013
Dingfeng Zhaoqing, Guangdong BHK 80 2013
Stora Enso Beihai, Guangxi BEK 700 2015
AdvanceAgro Dafeng, Jiangsu BHK 840 2014
Nanping Paper Nanping, Fujian DIS 150 2014
Stora Enso Beihai, Guangxi MEC 200 2015
April Rizhao, Shandong MEC 250 2015
April Rizhao, Shandong MEC 250 2016
Tiger Yuanjiang Paper Yuanjiang, Hunan MEC 200 2014
Chenming Shouguang, Shandong BHK 400 ?
China is expected to maintain a balance between
domestic pulp production and imports
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China: Forecast of Domestic Pulp Production and Pulp Imports
Imports
Production
Note: does not include dissolving pulp
Even our relatively conservative forecast indicates that
China’s market for hardwood chip imports will exceed
Japan’s by 2015
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Hardwood Chips Import Forcast, China & JapanMillion BDMT
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Japan
RISI’s 14th Annual Asian Pulp and
Paper Outlook Conference
• June 17-19, 2013, Four Seasons Hotel,
Shanghai – see http://www.risiinfo.com/events/asia_conf/
• June 19, 2013 – RISI seminar on Global
Timberland Investment Trends and
Opportunities for Chinese Investors, see http://www.risiinfo.com/events/asia_conf/timberland_investme
nts_program.html
7th International Woodfibre Resources
and Trade Conference
• Focus on international trade in woodchips and biomass.
• To be held first week in November, 2014, in Chile.
• Aimed at providing networking opportunities for both suppliers and buyers of woodchips and biomass.
• Conference web site www.woodfibreconference.com
RISI’s International
Pulpwood Trade Review
(also known as “the
woodchip bible”) has
provided information on
international trade in
woodchips and biomass
for the past 20 years.
See
www.risi.com/pulpwood
Contact: Bob Flynn
Email: [email protected]
