Wood chip trade flows in the Pacific Rim have changed substantially the past five years. Vietnam, Chile, Thailand, and Uruguay have all been increasing their shipments of chips, while Australia and South Africa have been losing their market share as fiber suppliers to the pulp mills in Japan, China, Taiwan, and South Korea.
Exports of hardwood chips from Australia fell 8% in the second half of 2011 compared with the first half, making 2011 the slowest year for chip exports since 2000, WRQ reported. Japan was a major importer of wood chips from Australia for many years, but shipments fell almost 30% in 2011 compared with 2010, reducing Australia's market share.
The good news, mentioned above, is that Australian chip shipments to China picked up during 2011. Total exports reached a record high of almost 700,000 metric ton, which was up 12% from 2010 and more than three times as much as five years ago. With the expansion of pulp capacity in China, it could be expected that Australian exports to China will continue to increase.
There is, however, a substantial difference in the average value for chips going to China compared with chips for pulp mills in Japan. In 2011, the premium for Japan-bound chips was almost $60 per metric ton.
Australia has been the largest wood chip supplier in the world for almost 20 years, but in 2011 Vietnam overtook this role with shipments accounting for about 20% of globally traded chips. Exports of Eucalyptus and Acacia wood chips from Vietnam have increased at a phenomenal pace the past 10 years. In 2001, the country exported only 400,000 metric tons of wood chips. In 2011, a new record of 5.4 million metric tons was reached. Last year's shipments were 36% higher than the previous years and a tripling from 2007.
The biggest boost to the establishment of fast-growing hardwood plantations and chipping facilities in Vietnam has been the expanding pulp industry in neighboring China. With limited domestic resources in China, the country will continue to rely on neighbors to supply wood raw-material in the future.
TAPPI
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