Report of Wood Products-Making Industry’s Climate in March 2013

By CnAgri2013-05-20 11:26:25 Print In March, according to questionnaires of purchasing managers of wood products-making industry, wood products-making industry is in the stage of production expansion. Not only production goes well, related work like purchase of raw materials and employment of workers are also expanding. Both domestic orders and export orders are increasing. Manufactured inventory is less stressed by further decreasing. Prices for raw materials continue increasing and inventory of major raw materials increases slightly. The particular concern now is still the tight supply of woods resources and price is going up quickly.
 
In the first quarter, wood and wood products industry developed better and the market recovered steadily: production increased, demand increased, inventory decreased and supply and demand were basically balanced. But, prices for raw materials have kept increasing since the end of 2012, especially price of logs. Influenced by continuous increase of international price, domestic price also climbs up quickly. We predict supply of wood resources shall be tighter and the prices are available for further increase.
 
Output: In March 2013, according to questionnaires, output of 70% enterprises increased, 30% of them kept basically stable and none of them decreased. As the data showed, wood products-making enterprises were expanding productions in March.
 
Orders: orders of 70% enterprises increased from last month, another 30% kept basically stable and no enterprises’ orders declined according to questionnaires. Orders increased dramatically and market demand also increased in March as the data showed.
 
Export Orders: in the survey, 40% enterprises have no export business. Orders of 70% of the rest enterprises kept basically stable, 20% of them, increased and less than 10%, reduced. The data showed export market continued recovering.
 
Current Orders: more than 10% of enterprises said it was hard to estimate, less than 50% enterprises kept stable and more than 20% enterprises declined. As data showed, market demand was rebounding furthermore.
 
Manufactured Inventory: inventory of about 60% enterprises kept steady, about 10%, increased and 30%, reduced. As data showed, supply and demand were basically balanced with less stress of manufactured inventory.
 
Purchase of Raw Materials: in terms of raw materials purchase, more than 10% enterprises reduced, 40% increased and another 40%, kept stable, which showed raw materials purchase was busily in progress and most enterprises were expanding production.
 
Import: in the survey, more than 40% enterprises have no import business. In the rest enterprises, 30% of them said the import increased, 50%, kept stable and 10%, reduced. According to the data, purchase of raw materials is also expanding in March.
 
Purchase Price: with regard of purchase price, more than 70% enterprises indicated no big change, more than 20% enterprises indicated price increase and no enterprises indicated price decrease. The data shows purchase price is still going up.
 
Price increased raw materials: some manufacturers of wooden doors and wooden floors reflected prices of veneer, teak, log and other raw materials increased. Some enterprises indicated purchase prices of major raw materials saw basically no change.
 
Price decreased raw materials: a few enterprises reflected prices of oak and Pometia logs declined and most enterprises showed prices kept basically stable.
 
Stocks of Raw Materials: in terms of stocks of raw materials, more than 70% enterprises indicated stocks kept basically unchanged, about 20% enterprises indicated stocks increased and less than 10% enterprises indicated stocks reduced. Data showed stocks of major raw materials increased compared with last month.
 
Workers and managers: about 60% enterprises showed employees kept basically unchanged, about 40% enterprises, increased and less than 10% enterprises, declined. As  data showed, employees were increasing and enterprise recruitments were intensively going on.
 
Delivery Time: as for delivery time of suppliers, 60% enterprises reflected the time was not changed, 36% enterprises showed that the time was accelerated and 4% enterprises showed the time was slowed down. In general, delivery time was speeded up, which showed market turnovers were frequently going on.
 
Days needed to purchase domestic raw materials for production: 60% enterprises should purchase raw materials one month in advance and 30% enterprises bought raw materials upon use, which showed it was convenient to buy domestic raw materials and the supply was adequate.
 
Days needed to purchase imported raw materials for production: 36% enterprises bought imported raw materials upon use, more than 30% enterprises, 1 month in advance, more than 20% enterprises, 2 months in advance and less than 10% enterprises, 3 months in advance. Data showed wood resources for import tended to be tight and days needed to purchase imported raw materials should be extended.
 
Raw materials with supply shortage: Teak, disc beans, hackberry, toothed gear, toothed plate, high quality standard plywood and MDF etc.
 
Main problems or difficulties in the purchase of raw materials:
1. Water ratio of toothed gear and toothed plate is not stable; 2. The quality standard is not unified; 3. Raw materials supply reduces and quality grade declines; 4. prices of raw materials increased; 5. Price is greatly fluctuated, which caused production cost cannot be estimated; 6. Costs for logistics and production increase; 7. Time for turnover of imported woods is too long and orders fluctuation influences delivery time; 8. Quality difference of raw materials is too large between different batches.  

From “China Wood Market Monthly Report”