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Arbor Resources Blog Updates

​Chinese imports of softwood and hardwood wood products will be
significantly altered in 2022 if Russia’s log export ban is implemented
China is the world’s largest importer of softwood and hardwood logs, and for many decades,
Russia has been a significant log supplier for them. This relationship may change in 2022
if Russia implements their proposed ban on exports of softwood logs and valuable
hardwood logs, while also introducing export taxes on green lumber. All these policy
changes are designed to encourage increased domestic production of higher-valued forest
products.
The Russian parliament has not yet announced the final legislative proclamation, so it is
not clear if there will be a complete or phased-in ban, a significant export tax, or even the
possibility of a state-owned export monopoly. However, a signal has been sent to the
marketplace that Russia will no longer be a major supplier of softwood and hardwood logs.
One consequence of this decision is that Chinese wood manufacturers will need to explore
new long-term log supply regions.
In 2020, China imported almost 6.5 million m3 of logs from Russia, predominantly
softwood species. The trade was substantially less than in any year during the past two
decades. Nevertheless, Russia was still the largest supplier of hardwood logs to China in
2020 (more prominent than any other source of temperate or tropical logs) and the thirdlargest
supplier of softwood logs.
It is crucial to keep in mind that China has shifted from sourcing logs from Russia to
European suppliers the past few years as insect-infested timber in Central Europe has been
in temporary abundance. From 2018 to 2020, softwood log imports from Europe increased
from 1.3 million m3 to 12.3 million m3, while Russian-supplied logs fell from 7.8 million
m3 to 4.2 million m3. However, shipments from Europe are not sustainable long-term.
According to the just-released study by the consulting firms Wood Resources International
and O’Kelly Acumen (Russian Log Export Ban in 2022 - Implications for the Global
Forest Industry), China is expected to source more sawlogs from Oceania, Europe, and the
US short-term. Longer-term, the study anticipates that China is likely to shift further from
WRI Market Insights 2021
- a subscription service from Wood Resources International
Global Sawlog Markets
Wood Resources
International
importing logs to lumber, thus creating opportunities for lumber manufacturers, mainly in
Europe and Russia, to increase shipments to this growing market.
The excerpt above is from the just-released Focus Report “Russia Log Export Ban in 2022 –
Implications to the Global Forest Industry”, published by Wood Resources International LLC
and O’Kelly Acumen. For more information about the study or to inquire about purchasing the
60-page report in easy-to-read slide format, please contact either Hakan Ekstrom
(hakan@woodprices.com) or Glen O’Kelly (glen.okelly@okelly.se). A Table of Contents of the
report is available on our website. Click here!
Contact Information
Wood Resources International LLC
Hakan Ekstrom, Seattle, USA
info@WoodPrices.com

Shipowners could face tougher emissions rules

23/11/2018

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Ships operating in New Zealand might soon be liable to tough new rules on air pollution and greenhouse gas emissions. International shipping is responsible for about 2.5 per cent of global greenhouse gases, but is not covered by the Paris Agreement. New Zealand is one of the few countries without restrictions on air pollution from ships. 

However, the Ministry of Transport is now calling for submissions on whether the country should sign up to air pollution provisions of the International Convention for the Prevention of Pollution from Ships (known as the Marpol Convention). 

“The benefits of signing up to Annex VI include reduced carbon emissions and improved air quality around our ports,” said MOT international connections manager Tom Forster. “It would align our maritime regulations with our trading partners, and give investment certainty to domestic ship owners and fuel suppliers.” 

If the provisions come in, domestic and international ships in New Zealand waters will be restricted to using fuels with a sulphur content of less than 3.5 per cent. The sulphur restriction is expected to drop to 0.5 per cent in 2020. 

Forster says that marine fuel produced in New Zealand has a sulphur content of less than 3.5 per cent. “The vast majority of our domestic ships use diesel fuel which complies to both standards – the ships directly impacted will be ferries, and large trading and fishing vessels,” he said. Submissions close in February. ​
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Log Export Statistics Update

8/11/2018

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The Indian log market is slowly adjusting to a new exchange rate of Rs 73 to 1 USD.

Two of the main New Zealand log exporters to India decided to not ship logs for October and this will help deplete unsold inventory. However, some of the more determined NZ exporters continue to ship without respite, putting immense LC pressure on the buyers. Many buyers have had to use third party LC opening agencies to stay afloat in terms of cash flow.

The Indian market for New Zealand logs closely follows the China market dynamics and an increase in the log price in China in should lift the morale of importers and spur renewed activity. 

Log exporters feel a turnaround in demand and pricing should occur in Dec/Jan. However, this is contingent on stability of the INR against the USD, and no more surprises on the trade war situation between China and USA. The NZ pine inventory in Kandla sawmills is not very high (20-25 days stock) but there are recent arrivals of NZ cargo being discharged in the port where sales have been agreed, but LCs not received. Furthermore, there is more than 30,000 JAS m3 unsold stock being moved into the custom bonded area in Port of Kandla. This will be cleared from Custom Bonded Zone only when LCs are received.

Indian Banks continue with a generally cautious approach and LCs in USD are hard to obtain across different import categories in the country. The merger of Bank of Baroda, Vijaya Bank and Dena Bank- to cover up large quantum of Non-Performing Assets (NPAs or bad debts)- has not changed sentiments for Public Sector Banks. The need for good governance in the Indian banking sector has become paramount
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    Author
    ​FRANK T DAVIS 

    A SURLY AND CYNICAL OLD CURMUDGEON WITH A JAUNDICED VIEW OF THE POLITICAL ELITE .

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