China: Zhangjiagang timber market gloomy

China market update – The combined effect of strict environmental inspection, the trade friction between China and the United States and the volatility of RMB exchange rate coupled with declining domestic demand is having a big impact on the level of trade and prices at the Zhangjiagang timber market. Analysts write that it is the falling domestic demand that is of most concern to traders.

Zhangjiagang city is the largest distribution centre for imported timber in China. At present there are 28 timber markets around the Zhangjiagang Port with an operation area of more than 1 million square metres and over 2000 timber traders and hundreds of timber processing mills. About half of these mills have developed in recent years.

Zhangjiagang timber imports account for about 25% of all timber imports. The major issue for the industries in the area during 2018 was environmental protection as wood processing plants become the focus of attention because of their poor pollution abatement technologies.

Most of the timber enterprises around the Zhangjiagang Port are family workshops having no effective measures to deal with pollution. This led to the Zhangjiagang industries becoming the focus of investigation in 2018.

As many as 60% of wood processing enterprises around Zhangjiagang Port have been forced to close due to environment control problems since the beginning of 2018. In addition the domestic economic downturn is proving fatal for many small enterprises.

The Chinese real estate industry is the mainstay of the national economy and this suffered a heavy blow in 2018 due to the economic downturn.