Market Brief-Wood

Market Brief-Wood Page 1 of 2

USDA Foreign Agricultural Service added tax (VAT) need to be paid by traders. Market Brief

Local expertise in South China Current Popular Promising Products/Species Products/Species Hardwood Western red alder Maple Red oak White oak Yellow poplar Cherry Maple Walnut Southern yellow Softwood pine Structural lumber Cedar Treated softwood Glued laminated Spruce beams Ponderosa pine

U.S. Hardwood U.S. hardwood was favored by Chinese to U.S. Wood Market Brief in South China use as wood material in furniture

manufactures, interior fittings, and wood Market Overview flooring. With China’s furniture exports The U.S. wood export to China was valued US$13.77 billion in 2005, furniture USD475 million in 2005, with a 24% is one of the largest consumers of increase than 2004. Lumber, logs, and imported U.S. hardwood in China. veneers are the most exported products to Guangdong province is the nation-wide China. U.S. ranks the fifth in China’s wood leading area for furniture manufacture, import. Competitors on hardwood are interior decoration materials, doors, Malaysia, Myanmar, Papua New Guinea, windows, wood flooring and mouldings and Gabon. Competitors on softwood are manufacture. Dongguan, Guangzhou, Russia, Germany, and New Zealand. As Shenzhen, and Shunde are the main bases Quality and price still are the biggest for furniture manufacture. Since the U.S. concerns of Chinese buyers, US wood hardwood is comparatively more expensive products companies face a competitive than wood from other countries or situation in a still price-sensitive market. domestics, it usually used in high-end furniture. Most of the fancy furniture In South China, lots of wood traders made of U.S. wood is exported to the import U.S. wood through HK trading United States, but not locally consumed. companies and supply to furniture In 2005, 47% of the Chinese furniture factories in South China. The U.S. wood export was to the U.S. export to HK was USD77 million in 2005. It was a 27% less than 2004. Most of this In the interior decoration sector, because HK wood import supplies South China the beautiful color, texture and desirable market. The shrink of export to HK grain patterns of U.S. hardwood, its indicates the trend that more and more application can create a natural, healthy Chinese trading companies import directly and western style. But usually only veneer from U.S., not through HK trading is used as a facing material because solid companies any more. wood is too expensive. With the commercial and real estate boom, Since the commercial wood products in approximately 700 million square meters China mostly rely on import, China of construction was finished each year. It welcomes importing wood. It is charged is forecasted that the flooring demand will at zero tariff rate. Only a 17% valued

UNCLASSIFIED Agricultural Trade Office in Guangzhou Market Brief-Wood Page 2 of 2 be 2.5 billion square meters, doors and Outlets of U.S. wood are timber markets, windows 500 million units by 2008. interior design and building material markets, home centers. Importers and U.S. Softwood distributors have its stores in or around Market demand and awareness for U.S. the markets. Each market supplies wood softwood is increasing, which is driven by materials to manufactures, wood construction industry, such as real estate, processors and contractors in its area. infrastructure construction and outdoor The business in the markets could tell the landscaping. Treated wood products, for current wood supply and demand, and the example, Southern Yellow Pine, are development trend. For examples, promoted to be used in public parks, Guangdong Yuzhu International Timber patios, decks, gardens and out-door Market in Guangzhou is equipped with facilities. Structural wood products are 600,000 sq.m space, cargo wharf of encouraged to build wooden bridges, capacity 3000 tons, two special railways landscape construction, golf courses, and direct to the national railway networks. large-scale gymnasiums, etc. High-end Dongguan Xinye Timber & Plywood Market housing (villas, townhouses) generates is in Dongguan, the largest furniture demand for structural wood framing and manufacture base in China, and equipped outdoors landscaping timber. South China with 320,000 sq.m space, 300 companies is a bit slower than East China market in distributing timber, plywood and decorative applying U.S. softwood and engineered materials. wood because few marketing and promotion activities, unawareness and ATO Guangzhou & FAS Cooperators misunderstanding on technical application In order to release the market constraints skills. However, in these three years, and identify opportunities for U.S. wood market awareness and sales are products, ATO Guangzhou and FAS increasing. The U.S. Softwood export to cooperators work closely. Through a China was USD53 million in 2005. combined effort, American Forest & Paper Association (AF&PA), the American Distribution Channels Hardwood Export Council (AHEC), APA – The components in the Chinese The Engineered Wood Association, the distribution channels for raw wood Softwood Export Council (SEC) and the materials and value-added products vary. Southern Forest Products Association, are But it could be simply summarized in the the FAS/USDA cooperators, and operating following chart. offices in Mainland China. China is a diverse place. Economic development, Importers geographic and climatic conditions, Large Manufacturers consumer preference, distribution and logistics systems are fragmented. Processors Marketing and sales approaches should be Manufacturers made after learning the local market Traders situation. We are actively in the China Distributors market to improve the traders’ and specifiers’ knowledge of U.S. wood, participate in completing building Wholesalers regulations and standards, provide trade Retailers assistance and technical consultation, Contractors exhibit at trade shows to strengthen the Regional Distributors U.S. wood exposure, and maintain good working relationship with local wood industry, government agencies and End Consumers associations.

UNCLASSIFIED Agricultural Trade Office in Guangzhou