China becomes major consumer of Australian eucalyptus

China has become the major destination for eucalyptus chips from Australia with record-high shipments in 2015, according to new research from forest industry consulting firm Wood Resources International.

Eucalyptus chip export volumes from Australia were up 15% in 2015 year-over-year to reach a record-high of 5.2m tonnes, valued at almost one billion Australian dollars. Shipments have increased for three consecutive years and were in 2015 about 58% higher than they were in 2012.

The major development in wood chip trade during past few years has been the increase in exports of hardwood chips to China. Back in 2010, chip shipments to China only accounted for about 13% of the total export volume from Australia.

In 2015, however, more than half of the chip exports were destined for China and the country has surpassed Japan as the major destination for Australian Eucalyptus chips, as reported in the Wood Resource Quarterly (WRQ).

Major chip-supplying countries

In the past Japan was the major consumer of hardwood chips from Australia, accounting for 80% of the export volume as late as 2010. Over the past five years, export volumes have fallen from about 3.6m tonnes in 2010 to an estimated 1.9m tonnes in 2015.

Australia has not only increased shipments the past few years, climbing from being the world's fourth largest exporter of hardwood chips in 2012 to trail only Vietnam in 2015 in terms of total exports.

About a third of the world's traded hardwood chips are currently originating from Eucalyptus plantation forests in Australia. Other major chip-supplying countries include Vietnam, Chile, Thailand, South Africa, Indonesia and Brazil.

Another noteworthy development is how the costs for Australian chips delivered to pulp mills in China and Japan have changed over the past few years.

During much of the period from 2011 to 2013, the price discrepancy for chips landed in China were about $50/oven-dry tonnes lower than chips delivered to Japan.

However, since early 2014 the delivered costs converged between the major consuming countries of Australian hardwood fibre, and they have remained practically the same since then only changing marginally in 2015.

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