Softwood chips play a major role in global wood markets, but hardwood chips far surpass softwood in terms of volume. The majority of global wood chip trading consists of hardwood chips in regions across the Pacific Rim.
In 2022 alone, worldwide wood chip trade included approximately 42 million bone dry metric tons (bdmt). Nearly two thirds of this amount was hardwood chips used in Chinese and Japanese pulpmills.
How do both of these markets fare into the latter part of 2023? And what can you expect in terms of overall trade volume?
Softwood Chips Experience Trade Disruptions in Europe
Japan still remains the largest importer of softwood chips in the world. But most global softwood chip trade actually happens in Europe. Central and Northern Europe are the primary consumers of these wood products.
We saw an all-time high for international softwood trade in 2018 at nearly 8 million bdmt. Since then, ResourceWise’s historical tracking shows a 25% downward trend to about 6 million bdmt in 2022.
A few factors have contributed to this drop:
Record levels of sales to China (which now demands the second-most world importer of softwood chips).
Compared to softwood chips, hardwood chips have historically posted strong numbers over the last several years. Pacific rim hardwood chip trade met a record level in 2022 of 29 million bdmt. This high point came after 15 years of near constant year-over-year increases.
Much of the hardwood demand has persisted thanks to ongoing growth in China. China’s import volume has spiked upward by 300% in the past 10 years alone—up to 29 million bdmt in 2022.
To put things in perspective, Japanese hardwood imports have sat at 10 million bdmt annually during this time. Although Japan is the second biggest importer, the volume difference really highlights how much growth China has experienced.
Other noteworthy Pacific rim hardwood imports include the following:
South Korea: 600,000 bdmt
Tawain: 600,000 bdmt
Indonesia: 400,000 bdmt
These amounts again highlight the sheer volume of hardwood chips imported by China. This is why the country plays such a big role in the global woodchip market.
Interestingly, Japan’s hardwood chip sales to pulpmills were much stronger in 1Q 2023 compared to the last four years. Japan’s increase in hardwood pulp production drove the need to import more materials to satisfy demand.
Outlook for Pacific Rim Hardwood Trade
ResourceWise data projects drops across several global wood products into 2023. This includes the global pulp market and the feedstocks it requires.
We anticipate 2023 hardwood chip trade will likely drop 10-20% compared with 2022 year-over-year numbers. The bulk of this drop, of course, comes from the already slowing Chinese import demand.
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