Slow economic recovery

The overall trend of the domestic timber market in the second half of 2012 is: shrinking demand, flat trading, low timber price fluctuations, and continuous decline in corporate profits. And this situation will continue for a long time, at least not during the year. Although the wood market is facing many difficulties at the present stage, with the continuous development of the domestic economy, it is expected that the economy of our country will inject new vitality. It is believed that the wood industry will usher in more room for development.

Whether or not the timber market has changed in the second half of the year depends entirely on changes in the economic situation at home and abroad, the further introduction of domestic real estate control policies, the impact of the quantity and structure of imported materials, and the digestion of timber inventories at coastal ports.

1, the economic situation:

From an international perspective, at present, the world economy is slowly recovering, but instability and uncertainty have increased. Regardless of developed economies or emerging economies, economic growth has declined; the risk of sovereign debt in some countries has increased, causing the international financial market to fluctuate rapidly; unemployment in major developed economies remains high, and inflationary pressures in emerging economies have risen.

These show the long-term, arduous, and complicated nature of the world economic recovery.

From the domestic perspective, many new situations and new problems have emerged in the economic operation. Mainly: there is downward pressure on economic growth, price levels are still at a high level, and real estate market regulation is at a critical stage. The data released by the National Bureau of Statistics recently showed that gross domestic product (GDP) increased by 7.8% year-on-year in the first half of this year, and has dropped for six consecutive quarters, hitting a new low since the 13th quarter. For the first time in three years, China’s economic growth rate has dropped below 8%. From the perspective of economic performance, the domestic economic environment is generally good, but there are also some unfavorable factors. At present, China's economic development has undergone some new phase characteristics. Long-term contradictions and short-term problems are intertwined, and macro-control is facing more dilemmas.

The gradual withdrawal of stimulating policies and stringent real estate control policies have further slowed economic growth, and the slowdown in exports has also exerted pressure on industrial production. Under the background of this domestic and international economic environment, the domestic demand for timber is unlikely to increase significantly. Coupled with the large influx of timber from Russia, North America, and Southeast Asia, the sales of domestic timber are also difficult and the price is difficult. Stop falling and rising.

In August, China's manufacturing managers index was 49.2%. Once again, the borderline of Ronghe, which is lower than 50%, also fell back to the lowest level this year. The macro data announced in recent days all show that China’s overall economic situation is still declining. Coupled with the slowdown in the growth of foreign trade imports and exports, and the difficulty in consumer spending, many agencies predict that economic data in August will remain difficult to be optimistic. All indications indicate that the Chinese economy is still in the process of bottoming out. In the fourth quarter, the economy is still expected to stabilise and recover under steady growth measures and the restoration of economic endogenous forces. The main tone of the later period policy is still 'stabilizing and progressing,' and the intensity of the pre-adjustment fine-tuning will increase, but it will not be too aggressive. Due to the weak market confidence in the short-term, the effect of many stable growth policies initiated in the second quarter may be extended to the end of the year. The actual growth rate of GDP in the third quarter is only slightly higher than that in the second quarter.

2. The impact of real estate control policies:

The executive meeting of the State Council held on April 13 this year clearly stated that adherence to the real estate control policy will not be shaken, and the regulation will not be repeated. Affected by the national real estate control policies, housing prices all over the country are in a state of stagflation. Developers have begun to scale down real estate development and have directly affected the consumption of wood. In addition, in recent years, the country has started the policy of new rural construction, and farmers’ housing has changed from individual self-built to unified collective construction. Some peasants who urgently need to build housing are awaiting the implementation of national policies, leading to a large shrinkage of the civilian wood market.

In recent days, all regions have gradually introduced tentative policies to liberalize real estate restrictions such as purchase restrictions and mortgage loans, but they are short-lived “day tours”. The central government's prompt halt may be a consideration of comprehensive macro-control. Therefore, the loosening policy of real estate regulation is still hardly noticeable.

3, the impact of imported timber:

In 2011, the development trend of China's imported timber was good. The annual import of commercial materials (logs and sawn timber) was 72.882 million cubic meters, exceeding the national output of 72.72 million cubic meters for the first time. The trade of wood and wood products in China has changed from a trade surplus to a trade deficit. This shows that the weakening of the international competitiveness of wood products in China will increase the outflow of domestic resources.

With the continuous increase of China's timber import channels, the pattern of timber imports has changed quietly. Although Russia’s timber imports still rank first, the influx of timber from New Zealand and North America makes it quickly become China’s second largest timber import channel. Although New Zealand radiata pine and North American Douglas fir are not as good as Russian wood, due to their advantages of low price, large diameter, and abundant supply, they have replaced traditional larch, Pinus sylvestris, birch, poplar in many fields. Wait for the tree species.

In the first half of last year, China’s imports of wood from Russia, New Zealand, North America, and other countries have seen strong growth, and there has been a trend of shifting from imports from land ports to shipping by sea. The importation of timber by sea transport is not only cheaper, but also has the advantages of huge transport volume, low cost, access to the port and direct use and processing users closer to the distance and other unequal advantages of our forest. In the second half of the year, the Suifenhe Port, coastal ports in Shandong and Jiangsu Province all accumulated large quantities of imported timber for sale, and their large diameter, excellent quality, and low price have formed a strong impact on the sales of large-diameter timber in the province. More than 500,000 cubic meters of timber in Suifenhe's stock and nearly 1 million cubic meters of wood accumulated in coastal ports and subsequent imports of wood are difficult to digest in the short term, and the impact on domestic timber sales will continue for months or even longer.

4, the impact of the surrounding areas:

The raw materials used by processing companies that produce sawdust and veneers in China are also undergoing changes. Last year, the price of domestically produced lumber has remained high, while the quantity of imported wood is large, the quality is high, and the price is low. Most processing companies turn raw material purchases into imports. Wood; major mining bureaus and other enterprises that use timber in large quantities have suffered from a significant reduction in domestic timber production after the implementation of the Phase II Natural Forest Protection Project since the last year. Large stockpiles of wood have been affected. Currently, inventory needs at least six months or more to be consumed. Purchase requirements.

According to a survey conducted recently by the China Timber Distribution Association in July 2012, the timber manufacturing purchasing managers survey showed that the overall production situation of the wood manufacturing industry continued to improve; the volume of orders increased from the previous period, and the inventory of finished products decreased from the previous period; raw material prices Little change has taken place, and it has basically stabilised; the pressure on major raw material inventories has been eased. At present, the main problems in the timber manufacturing industry are highlighted by the beginning of shortages in timber raw materials, increasing shortage of resources, and rising prices, especially for logs. This year, the import volume of logs continues to decrease. Therefore, the company reflects raw materials such as logs and wood chips. Purchase prices have risen to some extent. In addition, overcapacity in the industry, rising logistics costs, personnel costs, and production costs, sluggish export markets, slumping sales in the market, and decline in corporate profits are still major problems that plague the timber manufacturing industry.

Given the above factors, if the domestic and international economic environment does not improve or worsen in the coming period, it will undoubtedly further test the affordability of the entire timber industry. The recovery process of the timber market depends to a large extent on the domestic economic development, especially the real estate industry. While the country's real estate control policy has not been relaxed, the recovery of the property market in the second half of the year has become a bubble. This means that the timber market will continue its turbulent and sluggish situation. Wait and see mood continues to shroud the timber market. Therefore, the timber market will be a severe test in the future. And because of the lag, the recovery of the wood industry will be longer than the cycle of domestic economic recovery.