Sawn Timber: Later Market Expected to be Bearish

By CnAgri2013-06-17 11:39:32 Print

After tentative increase two weeks before, sawn timber market went down with consolidation last week and ended with 130.47 points, down 4.64 points from last week with decreasing rate of 3.43%. In terms of fundamentals, sawn timber market saw weak this week, mainly influenced by the following factors: firstly, as macro economy lacks boost by favorable factors, market trend is not clear and merchants are in general diffident about the market; secondly, continuance of rainy weather had serious impacts on wood market. Working progress slowed down significantly in downstream and wood consumption also slowed down; thirdly, with approaching of traditional slack season, orders declined gradually from downstream factories and purchase capacity declined, which caused turnovers of sawn timber to see no improvement. In addition, with regards of price, under the general sluggish market environment, manufacturers declined prices for promotions. In general, both turnover quantities and volume saw decline last week and influenced by overall environment, it is predicted sawn timber market shall keep steady at a low level in short terms.
 
Imported sawn timber consolidated with fluctuation this week and price index ended with 139.81 points, down 1.01%. With no bulk procurement requirements from downstream, general turnovers of imported sawn timber saw decline of 17% this week, which caused confidence frustration of market parties. Though some species raised price, which drove market trend up in some areas, mainstream quotation of sawn timber still ended with decline with the general sluggish market trend. It is predicted market trend of sawn timber shall still see bearish later. By close, price of red walnut, representative species of imported sawn timber, ended with RMB3582/m³, up RMB182/m³; price of merbau ended with RMB8575/m³, down RMB282/M³.
 
Price index of domestic sawn timber ended with 127.35 points, down 0.33%. With continuous weak demand from downstream and lack of attractiveness of domestic sawn timber, market parties have less confidence in later market. In general, manufacturers usually lowered price so as to have quick turnovers. But full of bearish news, demand was hard to recover, which caused domestic sawn timber into deadlock. It is predicted the market shall keep gloomy with fluctuation later. By close, price of pinus sylvestris, representative species of domestic sawn timber, ended with RMB2525/m³, down RMB83/m³; price of basswood ended with RMB3582/m³, down RMB119/m³.

From “China Wood Market Monthly Report”