Many timber processing plants in Guangdong Province have stopped or limited their production recently due to local environment protection policy and supervision and this will likely lead to a sharp rise in the price of construction timber in the domestic market.
November is the peak season for Guangdong wood processing enterprises and reduced production will cause delays in deliveryies to construction projects. Timber processors are being encouraged to move to Huizhou (also in Guangdong Province), but many have not yet done so.
Efforts are being made to meet the shortfall from Belt and Road Initiative countries, but this is only a stopgap measure. Local analysts are telling traders they should exercise caution in signing contracts in Guangdong province to avoid large increases in production costs. At the same time, customers should place orders early to ensure adequate supplies.
Panel output in Guangdong province declined in the first three-quarters of 2019: plywood by 4% to 2.05 million cu.m, mid- and high-density fiberboard by 0.5% to 3.09 million cu m, and particle board by 17%, to 1.59 million cu m over the same period last year.