May Log Market Analysis in China and India

Posted on July 6, 2020

CFR sale price in China increased from 100 USD for A grade to the 105-109 range Total log inventory has doubled to over 8 million m3 in China Many mills were buying increased log volume at lower price levels to avoid the expected price increases. The softwood log inventory in China ports is 4.5-4.8m m3. Daily port off-take of logs is in the 50-60k m3range which is down when compared to the same time last year of 80-90k m3. 70-75% of the logs China imports is used for domestic consumption. The remaining 25-30% of log imports is manufactured into export products. Government announced a fiscal stimulus package of almost RMB 3.6 trillion (506 billion USD) to lead China’s economy recovery following the COVID-19 disruption. As part of this package, the government will issue RMB 1 trillion (140 billion USD) worth of special treasury bonds and increase the local government special bond quota to RMB 3.75 trillion (527 billion USD) In India approximately 70% of the log and timber processing facilities in Gujarat are closed even after getting permission from the Indian government to restart activities This is due to very little demand for timber products and over 50% of the migrant labour returning back home due to the COVID lockdown uncertainties.

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