Pacific Rim Market Dynamics: Is Wood Fiber Supply Keeping Pace with Pulp Capacity Expansion?

The Pacific Rim region, particularly China, has long played a pivotal role in global pulp mill investment and wood fiber demand. With continued growth on the horizon, the region remains a powerful force. However, as new pulp mill projects come online, a critical question more people are asking is: Will fiber availability be able to keep up with rising demand?

Hardwood and Softwood Chip Supply and Demand Trends

While softwood chip traded volumes have held steady over the past year, hardwood chip trade has seen a marked uptick. Demand is being driven primarily by pulp mills in China and Japan, with China leading the charge—in 2024, its hardwood chip imports surged 21% year-over-year. In contrast, Japan’s demand, while still significant, is beginning to show signs of decline with a decrease of imports by 3% year-over-year. Meanwhile, smaller but emerging players such as Indonesia, South Korea, and Taiwan continue to add incremental pressure to overall regional demand.

When looking at hardwood chip exporters, Vietnam has been the world’s leading supplier for more than a decade. It now accounts for more than half of global exports. However, other countries such as Australia and Chile have seen their exports decline.

The softwood chip trade has been notably disrupted in recent years, primarily as a result of sanctions following Russia’s invasion of Ukraine. These sanctions have dramatically altered trade patterns. Finland, for example, saw a sharp 72% drop in total softwood chip imports in 2024 compared to 2021. Where Russian material once made up nearly three-quarters of Finland’s imports, by 2024, that figure had plummeted to zero.

Investment in the Pulp Sector Adds Complexity

Across Asia, particularly in China and Indonesia, investments in new pulp mill infrastructure are accelerating. Backed by major players in the industry, these new and upgraded facilities signal a long-term commitment to growing production capacity. But they also prompt an important question: will there be enough wood fiber to support this growth?

Coinciding with this push for pulp capacity expansion is the emergence of China’s own domestic wood fiber supply. China’s pulp industry will almost certainly be looking to utilize a significant volume of domestically sourced fiber to help meet its wood fiber needs in the near future.

Dive Deeper Into the Data with Market Insights

For a deeper look at import and export data, the latest developments, and regional investments shaping the future of Pacific Rim hardwood chip markets, download our recent Market Insights report “Pacific Rim Hardwood Chip Trade Hits Peak Again as Pulp Mill Growth Fuels Fiber Supply Concerns.”