2020 is destined to go down in history. At the start of the new year, the COVID-19 pandemic swept across the globe, sending stock markets plummeting and leaving countless businesses struggling through a long winter. Recently, both domestically and internationally, China has faced frequent provocations from the United States, while at home, it has been plagued by continuous flooding and recurring outbreaks of the pandemic.

Although the 42-day plum rain season has come to an end, some cities are still suffering from flooding. Meanwhile, most parts of the country are experiencing scorching temperatures—woodworkers running around outdoors are practically “drying out” in the heat. But what’s the situation like in the wood market itself? June and July traditionally mark the off-season for China’s wood market; yet this year, the off-season hasn’t been off-season at all, and the peak season hasn’t been peak either. In July, market conditions have essentially remained at low levels.

Since entering July, timber prices have not experienced significant fluctuations and have remained generally stable at low levels. Localized minor fluctuations have not affected the timber market. As the end of July approaches, some lumber merchants, facing financial pressures, remain quite eager to sell their inventory. However, the hot and rainy weather has temporarily slowed down demand for lumber, suggesting that lumber prices may fluctuate amid heightened market uncertainty and a strong wait-and-see attitude.



However, according to reporters from China Wood Industry Network, some downstream panel manufacturers have recently indicated that raw material prices have risen compared to earlier levels, prompting corresponding price increases for their panel products. Meanwhile, certain foreign trade timber enterprises have stated that, influenced by a variety of combined factors, they will no longer cover the freight costs for shipped goods.



In the first quarter of 2020, infrastructure and real estate investment growth slowed significantly due to the pandemic. In the second quarter, as the epidemic situation improved, various indicators continued to rebound, with some even turning positive from negative—performing better than expected. In the second half of the year, as the country increases investment in infrastructure and the real estate market continues to recover, demand for timber is expected to keep improving. It is forecast that nationwide timber demand in the second half will be stronger than in the first half.



On the one hand, China is the world’s largest importer of timber. As various industries continue to develop, demand for timber in the market is expected to keep growing. According to estimates, by 2020, China’s demand for timber could reach 800 million cubic meters, leaving a gap of approximately 200 million cubic meters. According to data from the research report “In-depth Study on the Timber Market 2020-2025” published by Zhongyan Puhua, the rapid development of the timber processing industry has led to significant improvements in various forestry ecological indicators. Between 2003 and 2019—a period of 15 years—China’s timber production increased by 87%, while timber consumption rose from about 50 million cubic meters in 1978 to roughly 631 million cubic meters in 2019. Of this total consumption, timber used in construction accounted for 237 million cubic meters, representing 36.7% of the overall timber consumption.



On the other hand, the domestic economy continues to recover and improve. This year, the country has adopted an easing yet prudent monetary policy while simultaneously boosting infrastructure development and the renovation of older residential communities, leading to positive expectations for future demand for lumber.



In the first half of the year, the national timber market experienced sharp and volatile price swings—wood industry insiders described it as “like a roller coaster.” Meanwhile, July and August in the second half of the year mark the seasonal low season. Starting in September, as temperatures begin to drop, the lumber market is starting to recover, and lumber prices are expected to stop falling and rebound. In the fourth quarter, construction projects will intensify their efforts to meet deadlines, leading to a significant surge in demand for lumber. Woodmen, keep a close eye on market conditions—when the time is right, don't hesitate to take action!



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