China has always been a big consumer of Radiata Pine Lumber Solutions from New Zealand. We believe this trend will continue, despite fierce competition from Europe. Here’s why:
Developing knotty lumber furniture market
Much of the modern style furniture made for the local Chinese market are made from white woods, with no knots or flecks. Manufacturers making for export have used the slightly darker and fleckier New Zealand Radiata Pine. It is interesting to note furniture beginning to be designed for the Chinese consumer using Radiata Pine from New Zealand. This is good for New Zealand, as a massive reduction in our pruned logs is reducing the availability of clear grades. Also, New Zealand has a large volume of logs coming ready for harvest, so we need a big market like China ready to take knotty wood.
China will soon build with wood
China builds from concrete and steel, not wood. This year however China will ratify new building codes that will enable the development of multi-level buildings using wood. A key component of this wooden construction opportunity will be CLT (Cross Laminated Timber), see our previous article on CLT here. Wuhan, a city in Hubei Province, China, recently declared themselves the Green Building Capital of China and see CLT as a key building material of the future.
When you grasp the scale of urban development in China, the opportunity the new building codes represent is huge. Vast amounts of lumber will be needed to fill this need, much of it will come from New Zealand and other markets such as Europe.
Europe is acutally flooding lumber into the China market at present. This is occurring for a number of global economic reasons, primarily the collapse in the Russian Ruble, and is resulting in dramatically increased exports to China from Russia, Finland and Eastern Europe. This is placing a lot of price pressure on the overall market. Fortunately our clear point of difference, custom cutting, enables us to obtain a premium, whilst still adding value to the customer.
Custom Cutting – A big Opportunity for Sequal
Our custom cutting approach is very unique and adds real tangible value to furniture makers and CLT makers. Whilst price is a challenge, more often then not our custom cutting more than offsets the price variance.
Our challenge, as always, is to better understand our customers so that we can deliver quality Radiata Pine lumber solutions.