Vietnam Fuels China's 155.8% Surge in North American Hardwood

China's Hardwood Influx via Vietnam

China's imports of North American hardwood logs and lumber from Vietnam surged by 155.8% in the first seven months of this year, according to China's General Administration of Customs. This growth positioned North American hardwood lumber as the largest single import line from Vietnam in July.

Ash accounted for half of China's timber purchases from Vietnam during the first four months of the year. Oak lumber imports from Vietnam saw a more than 60-fold increase year-on-year over the same period. Additionally, overall North American hardwood lumber imports from Vietnam grew 26-fold, making it the second-largest category after ash.

In contrast, direct shipments of American lumber to China were 32.2% lower in April compared to the previous year, despite US log arrivals recovering to 106,000 cubic meters.

Tariffs and Market Adaptation

Market analysis published in China indicates that this significant increase was not solely due to expanding domestic demand. Instead, some US-origin timber is being processed or re-exported from Vietnam to circumvent high tariffs imposed on American timber, a consequence of trade friction between Washington and Beijing last year.

Industry insiders in China describe this trend as an "adaptive adjustment by the market," as timber trade between the two countries restarts but has not yet returned to its previous scale.

China has listed American hardwood lumber for tariff reductions under its 30-for-30 framework with the United States, following a pause on American log purchases in March last year, which cut US log arrivals by 71% the following month.

Vietnam's Evolving Trade Role

Vietnam's Ministry of Agriculture and Environment reported that China surpassed Japan to become the second-largest buyer of Vietnamese wood and wood products in the first seven months of this year. Exports to China rose by 46.4% to US$1.54 billion during this period.

The United States remains Vietnam's largest market, despite a 5.8% decrease in shipments, which Vietnam's Ministry of Industry and Trade's Agency of Foreign Trade attributed to stricter trade defense measures.

While Vietnam is a significant importer of US wood, it is still a smaller supplier to China than Thailand, which provided 44.5% of China's hardwood lumber imports last year. Overall shipments from Vietnam to China grew 139.8% last year, with ash lumber predominantly sourced from Vietnam, Russia, and the United States.

The pace of growth has slowed, with July's logs and lumber shipments from Vietnam to China up 48.5% year-on-year, a rate below the first seven months' average.

Sourcing Implications for Asia's Buyers

For procurement teams and specifiers across Asia, the evolving trade dynamics for North American hardwood through Vietnam necessitate careful attention to sourcing strategies.

Buyers seeking ash and oak should verify the actual country of origin and processing location with their suppliers to ensure compliance with trade regulations and to potentially secure more competitive pricing. Vietnamese manufacturers are actively increasing their focus on the Chinese market, partly in response to US duties on their hardwood plywood.

These companies are employing re-export processing and leveraging the Regional Comprehensive Economic Partnership (RCEP) rules of origin to optimize their exports to China.

This market adaptation suggests that Asian buyers may find varied pricing and lead times depending on the specific supply chain route, making direct communication with suppliers about timber origin and processing crucial for projects in the region.