Chile, Brazil Begin Chip Exports to China
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In 2007, China imported wood chips from only three countries—Vietnam, Indonesia, and Australia, who together shipped 1.1 million metric tons throughout the year. With the fast expansion of the pulp industry in China, the country is rapidly growing its need for wood fiber. Domestic supplies have proven inadequate, so the list of supplying countries has expanded from three to eight during the past 12 months, according to the Wood Resource Quarterly (WRQ), Seattle, Wash., USA.
Two of the three chip-exporting countries in Latin America, Chile and Brazil, sent the first vessels with eucalyptus chips since 2006 in the third quarter of last year. The total volume exported from the two countries in 2011 was 100,000 metric tons, and during the first seven months of this year, 76,000 metric tons have been shipped, a majority from Chile. Wood chips from Latin America still accounted for only 3% of all hardwood chips imported to China in the 2Q/12, and these chips were among the costliest chips landing in the country, WRQ notes.
So, although Chinese pulp mills will be in search of additional wood fiber in the coming years, it is not likely that either Chile or Brazil will be major competitors to countries in closer proximity to China, including Vietnam, Thailand, Indonesia, and Australia. Chile most likely will continue to ship a majority of its chips to Japan, where its chips are more competitively priced with other supplying countries.
During the first six months of 2012, Chile was the largest supplier of hardwood chips to Japanese pulp mills, followed closely by Australia. Chile's market share in this market has gone from 17% five years ago to 27% in the first half of 2012. With chips from Chile being less costly than Australian chips delivered to Japan, there will continue to be opportunities for Chile to gain market share in the Japanese chip market in the coming year.
More information is available online.
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