US Dollar Exchange Rates of 25th August 2018
China Yuan 6.81
Report from China
Rise in home sales
In the first seven months of this year investment in real
estate in China expanded at a fast pace. According the
latest press release from the National Bureau of Statistics
(NBS) investment increased 10.2% year on year in the
first seven months, compared to the 9.7% expansion in the
January to June period
Investment in residential real estate increased 14.2% in the
first seven months, compared to 13.6 percent in the first
half of the year.
In the same press release the NBS says the area of land
purchased by real estate developers, was up by 11.3%
In response to what was deemed an overheated market the
government and city authorities have acted to cool market
growth. Administrators in major cities across China have
introduced a raft of regulations, in some case over 200 up
to July, an all-time record according to Centaline Property
Agency one of the largest property agencies in Hong
In an effort to hold down house prices there are now limits
on the number of properties which can be owned, the
minimum down-payment has been raised and there are
limits on how quickly a recently purchased property can
be put back on the market.
Working against efforts to cool house buying as an
investment has been the recent sharp decline in interest
rates making loans that much cheaper.
Southwest China to see investment in timber ports and
A cooperation and investment agreement was recently
signed between China Forestry Group Corporation and the
administration in Ba’nan district of Chongqing
municipality. An investment of RMB23 billion will be
used to build timber trade ports, a timber processing zone
and a wood products demonstration and trading centre in
Currently in China the timber ports and industrial zones
are mainly distributed in coastal areas and along the border
areas and there is a gap in the southwestern regions of
The new infrastructure will result in large volumes of
imported timber entering the southwestern regions and this
will cut transportation costs for enterprises in the region
and will also expand employment opportunities.
It is forecast that demand for timber would expand to 100
million cubic metres in the southwestern region including
Yunnan, Sichuan, Guizhou, Guangxi provinces, Xizang
Autonomous Region and Chongqing municipality.
Chongqing municipality is the distribution centre in
southwestern China and the technology for timber
processing mills is well established and production costs
are very competitive, say analysts.
Surge in landed cost of North America logs
Traders in China are complaining that the landed cost of
imported North American logs has jumped by around 30%
as a result of the depreciation of RMB and the trade frition
between China and the United States.
Although shippers in the US have been lowering log prices
to maintain market share in China the higher costs
continue to be a major challenge to Chinese importers.
The reason behind this is that, even with price reductions,
landed costs are still higher than previously which means
competitiveness in the domestic market is weakened and
traders are losing out to alternative timbers.
At present, the price for grade A processing general
materials (2-4m) North America hemlock and fir in the
Guangdong market is between RMB1680-1760 per cubic
metre. The price for grade A processing general material
(2-4m) southern pine is between RMB1580-1660 yuan per
Decline in plywood imports
In the first half of 2018 China’s imports of plywood fell
9% to 79,400 cubic metres. Of the total, imports from
Malaysia were the highest at - 22%, from Indonesia and
Russia imports fell 11% and 10% respectively.
The proportion of China’s plywood imports from Russia
was the highest in the first half of 2018 at 27% (21,100
cubic metres) followed by Malaysia to 25% (19,850 cubic
metres) and Indonesia to 19% (15,000 cubic metres).
Surge in timber imports from Japan
According to the data from China Customs, China’s log
imports from Japan have increased from 311,600 cubic
metres in 2014 to 750,600 cubic metres in 2017. 2017 log
imports from Japan were worth US$102.44 million and the
average price for logs from Japan rose 8% to US$136 per
In 2017 China’s sawnwood imports from Japan were 74,
600 cubic metres valued at US$18.44 million, up 39% in
volume and 32% in value. The average price for
sawnwood from Japan fell 5% to US$247 per cubic metre.
Wooden pallets demand for huge timber
Pallets are the essential in logistic operations and it has
been estimated that at the end of 2017 the stock of pallets
in China exceeded 1.263 billion pieces of which wooden
pallet accounted for 73% with plastic pallets taking up
most of the balance.
Wooden pallets are said to have a cost advantage. In China
the price for a wooden pallet is around RMB150 but for
plastic pallet the price is over RMB250. The demand for
wood for pallet manufacture is huge and manufacturers
warn that pallet prices will rise as the landed cost of timber
Logistics enterprises plan to address this by switching to
pallets from alternative materials.
Analysis shows that the annual cost of plastics pallets is
lower than wooden pallets because of improved service
life. Moreover, plastic pallets can be cleaned and used for
transport of fresh food, medicines and other perishable