Wood Chips from Latin America Still Dominate in Japan
In late 2011, Brazil and Chile sent the first chip vessels to pulp mills in China in over five
years. In the past, Japan had been the major destination for Latin American Eucalyptus
chips. With Japanese pulp mills paying considerably more than Chinese pulp mills for
chips, it is likely that a majority of Eucalyptus chips from Latin America will continue to
be shipped to Japan.
Sept. 20, 2012 (Press Release) - In 2007, China imported wood chips from only three countries: Vietnam,
Indonesia and Australia, who together shipped 1.1 million 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 over the past 12 months.
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 last year. The total
volume exported from the two countries in 2011 was 100,000 tons, and during the first
seven months this year, 76,000 tons have been shipped, a majority from Chile.
Wood chips from Latin America still accounted for only three percent of all hardwood
chips imported to China in the 2Q/12, and these chips were among the costliest chips
landing in the country, as reported in the Wood Resource Quarterly. 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 will most likely 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 the Japanese pulpmills,
followed closely by Australia. Chile’s market share in this market has gone from 17
percent five years ago to 27 percent 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
SOURCE: Wood Resources International LLC (www.woodprices.com)