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china paper goverment letdown

Started by timberlinetree, June 23, 2013, 07:24:40 AM

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timberlinetree

I'm not real smart or a world economics analyst but I just read that China has tripled its paper production in the past few years. They can produce a mile of glossy publishing grade paper in a minute! China can now match the annual output of  Wisconsin(America's top paper making state)in the span of three weeks!China has doled out at least 33 billion dollars in subsidies to paper industry! Now China has surpassed the USA  and is the world leader in paper manufacturing. Not sure but thought I heard that CANADA has helped put their paper industry! I could be wrong but haven't heard of any help from our government on the forest products industry except for some biomass plant grants that didn't pan out. What is our government doing for us to make the playing field fair? They take a lot of our hard earned money but spend it on what? Sad to say but we are not world leaders  anymore(at least with paper) .         
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Jeff

I'm going to move this into Forestry and Logging for now. As long as it does not get political, and focuses on the industry, that will be a good place for it.
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chevytaHOE5674

Quote from: timberlinetree on June 23, 2013, 07:24:40 AM
What is our government doing for us to make the playing field fair?

We will never have a fair playing field with anything coming from China. Labor costs, lack of regulation, etc make it cheaper for China to produce it.

Okrafarmer

Don't worry, I've been to China, and I think there is a simple explanation. Over time, the Chinese are becoming more civilized. With over 1.2 billion people coming out of the dark ages, more of them are learning to read, more of them are finding time to read, and more of them can afford to buy things to read. And besides that, millions upon millions of them are learning the benefits of toilet paper for the very first time. And if you think I'm trying to be funny, well. . . . I'm less than half joking.  :o

It only makes sense that as they develop their civilization, and find a need for more paper domestically, they will develop their own paper industry. Just remember, if they used as much paper as we do per capita, that would be at least 4 times as much.

Sooner or later, the market will stabilize.

They also need a lot of paper for cardboard production, to package all the toys and tools they send to us.  :-\

Chevytahoe is right. It will never be a fair playing field. However, if the Chinese fail to implement good forestry practices, then within two generations, we will be competitive with them again.
He that dwelleth in the secret place of the most High shall abide under the shadow of the Almighty. Psalm 91:1

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Ron Wenrich

There are 3 times as many people in China as there are in the US.  That gives them a marketplace for all that production.  Seems to me, they should be producing more than us.

Another thing to consider is the necessity for paper.  Other than disposable papers, we have a dwindling need for it.  Book paper is being replaced by the electric media.  You need to have an exceptional book to get any amount of demand.  Newsprint is also on the way out.  Newspapers are only preferred by the over 50 crowd, and it gets less the younger the individual.  Eventually, newspapers will be a thing of the past.  Packaging has also yielded from paper to plastic.  What used to be in a box is often now in a plastic bag.  Paper bags have yielded to plastic. 

Where is the future for paper?  The forest industry may have to rethink its product line.  Maybe there is a better market for wood chips than paper.  To subsidize an industry that may be on its way out will just delay the inevitable.  Markets should decide winners and losers. 
Never under estimate the power of stupid people in large groups.

timberlinetree

Thanks for pointing that out! It's a confusing world out there   :-\ This whole world is getting more and more complicated... I'm just gonna keep cutting wood, hope for a better paycheck, and stop reading anything political... and keep using paper bags at the grocery store ;-)
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Okrafarmer

Let's also remember that most plastics are petroleum products. Theoretically, if the real cost of petroleum production were to double, so would the cost of plastics. Petroleum products and wood products compete with each other on many different playing fields. In many cases, wood products (including paper, cardboard, laminate, and compressed fiber boards) can compete with petroleum products. It is merely (or primarily) a matter of the price of production of each that determines which is used in each instance. Wood competes with petroleum products for things like fuel, packaging, structural products, energy production, and widget construction (toys, tools, utensils, decorations, furniture, etc.). Wood competes with metal, concrete, and masonry products for heavy structural applications, as well as certain other areas. The various qualities that wood and the other products can offer does make a difference on the decision of what to use, but it is a differential of price versus utility. It would seem that for packaging materials, they are somewhat balanced at the moment, but a huge swing in price for wood or petroleum products will have a big effect on the demand for the other.
He that dwelleth in the secret place of the most High shall abide under the shadow of the Almighty. Psalm 91:1

Operating a 2020 Woodmizer LT35 hydraulic for Upcountry Sawmill, Dacusville, SC

Now selling Logrite tools!

Writing fiction and nonfiction! Check my website.

Kansas

I did some looking around on the web, curious because I knew China's forest were pretty well shot years ago. They do import a lot of pulp from other countries. But what blew my mind was this. They grow eucalyptus trees that grow to 90 feet tall in 4-6 years in plantations. Never knew that was possible. Here is the article.

http://www.jsonline.com/business/bankrolled-and-bioengineered-china-supplants-wisconsins-paper-industry-183049221.html

indiaxman1

Hemp production in U.S....could offset loss of standing timber...both price and quantity....and I ain't talking the smoking variety....the father of our great country grew acres of hemp....he was a smart man

Kansas

I read where the marajuana market was about 40 billion in this country. Of course, if it was legal in all states, competition would drive the price down. However, the hemp market is estimated at 45 billion dollars potentially. That's a lot of moolah.

A story about all that. I may have told it before, but will repeat it. Kansas ditch weed, as we refer to it, is worthless as pot. But I can attest to how tough it is. Getting ready to round up cattle, I went down and bush hogged what I could out the corral in the pasture. Sent the son, then about 12 years old, down with a corn knife and a steel blade on the weedeater. He comes back and says, Dad, I can't cut any of it down. I get mad, we go down there so I could show how its done. Fire up the weedeater, and the steel blade with teeth just bounces off. The corn knife did nothing. In the end, had to use the chainsaw to get the rest cut down. That is some tough stuff. I could see some great yields on rougher ground.

1270d

I believe Ponsse sold something like fifty harvester teams to the Chinese so they could ramp up their euca production.  I got to visit with one of the guys that went to china to train them.  Interesting stories.  The man was also the grandson of the founder of Ponsse.

Euca is also produced on the short cycle in south america.

240b

Check out the huge sawmills in Northern China on Google Earth. The Rail tracks lead right in to Far Eastern Russia.  No Osha or EPA.

Okrafarmer

I just read the article. Wow. That is disturbing. I know Eucalyptus could be grown in some of the more southerly areas of the US, but the broader point is, there only ever will be a certain amount of paper needed. If the supply is far higher than the demand, the prices will slump. If it is easier (or cheaper) to harvest fast-growing Jack-and-the-beanstock Eucalyptus plantations, then traditional timber will become unprofitable to harvest for pulp. That means that millions of acres of timber would not be worth harvesting, or would not be worth processing the small wood when the big timber was harvested from it. What would happen to all our millions of acres of timberland, if nobody could find a good reason to harvest or manage it?
He that dwelleth in the secret place of the most High shall abide under the shadow of the Almighty. Psalm 91:1

Operating a 2020 Woodmizer LT35 hydraulic for Upcountry Sawmill, Dacusville, SC

Now selling Logrite tools!

Writing fiction and nonfiction! Check my website.

thecfarm

There is a difference in pulp wood and sawlogs,be it for a house or for furniture,with what you are saying.
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1270d

I believe there is a mill in south america that runs on eucalyptus and is surrounded completely by plantations.  Supposedly they will never have to transport their timber more than 6or 7 miles.


beenthere

Okra
We are not harvesting the timber on millions of acres of Forest Service and BLM land now. So it stands, dies of old age or bugs, and burns.

I've heard our paper mills have been getting a lot of pulp from South America for 30 years or so. Demand controls.
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Okrafarmer

So basically we're at the point where stumpage costs should be about zero. The idea is "We don't really need your wood. If you want us to harvest it we can, but you won't get any money."
He that dwelleth in the secret place of the most High shall abide under the shadow of the Almighty. Psalm 91:1

Operating a 2020 Woodmizer LT35 hydraulic for Upcountry Sawmill, Dacusville, SC

Now selling Logrite tools!

Writing fiction and nonfiction! Check my website.

Ianab

That's pretty much the situation here for pulp logs. Harvesting and trucking are the major cost, and small lots may be pretty much sold for zero value. Same with plantation thinning, you might get enough for the logs to cover the cost of the work, if you are lucky. More likely they are just thinned to waste.

But usually the pulp logs are a by-product. The top logs from good saw log trees. They are at the landing at this stage, it's more sense to load them on a truck and ship them out, even if the landowner is only getting $5 or 10 a ton. If he's getting $50-200 ton for the rest of the tree, then it's a good deal.

But no one grows trees here with the intention of only harvesting pulp. Sure you could, on maybe a 10 year rotation with dense pine or eucalyptus, but you wont make any $$.

Ian
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240b

How many rotations can they get with Eucalyptus on in those tropical soils. I remember reading about how after a few seasons crops didn't do so well down there.

Kansas

Okra pretty well nailed it. Here in Kansas every winter most of the logs we get are from salvage jobs from timber being pushed out for more farmground. Logs just aren't worth what corn is. Pastures overgrown with ERC are clipped and the piles burned. Still hoping to see a market going for that as biofuel. It remains to be seen if that is viable.

The problem is transportation costs. You can't put too many miles on biofuel chips, and I expect pulp is about the same. The government has subsidized some of that with Ccap money, but I saw what happens when the money runs out. Companies go out of business. Not wanting to turn this into a political thread, but realistically at some point those businesses have to stand on their own. Still remember the company out in western Kansas that was transporting chips in from Wyoming and Colorado courtesy of the Ccap money. When that money dried up, they went bankrupt.

Ron Wenrich

Kimberley Clark went out of the pulpwood business about 15 years ago.  They started to bring in processed pulp from South America, so that all of their products were consistent in quality.  Mills that relied on them for processing their pulp chips had to find other outlets.  Some loggers went out of business.  Others found other outlets for their pulp, mainly as firewood, since we're mainly hardwood.

I know of loggers who never cut pulpwood.  One of the largest outfits in the state never cut pulpwood, only sawtimber.  Its a poor way to manage woodlots in many instances.  But, you have to work with the markets you have.

At some point, technology usually finds a new market for material.  OSB has found more uses in structural uses.  Engineered wood may be where the wood industry is headed. In many instances, wood is competing with itself for market share.  Plywood vs OSB vs particleboard.  I saw some info where RR ties were using OSB as a core and plastic as an exterior.  Maybe they find an alternative use for those chips.  But, that doesn't mean that chip prices will come up.

I just read a book by Kevin Maney about products and services in the marketplace.  A product has either fidelity or convenience.  One with fidelity is one that people love to own, and they would pay more for that.  Solid wood is one example as is slow growth pine.  Convenience is one that people need to own, such as toilet paper.  They're looking at cost factors and ease of use.  You cannot serve both markets at one time.  If you try, you become irrelevant in the marketplace.

If you know the market you're striving for, you can grow or harvest your wood accordingly.  Some wood will serve different end markets.  But, their value will depend on the market being addressed.  Some of those markets are affected by markets outside our control, such as the book market. 
Never under estimate the power of stupid people in large groups.

240b

Quote from: Ron Wenrich on June 24, 2013, 05:59:45 AM
  A product has either fidelity or convenience.  One with fidelity is one that people love to own, and they would pay more for that.  Solid wood is one example as is slow growth pine.  Convenience is one that people need to own, such as toilet paper.  They're looking at cost factors and ease of use.  You cannot serve both markets at one time.  If you try, you become irrelevant in the marketplace.

People will pay for what they want, not for what they need.     Also look at what timber investment companies are buying. Northern Hardwood tracts; you can grow fiber most places on the planet, quality hardwood logs not so much.  Its only a matter of time before all the paper mills in New ENgland are gone. In Vt we are lucky
to have good biomass markets and strong fuelwood markets, which allow good forestry to be possible still.

Ron Wenrich

Depends on the size of your market and the size you want.  If you're looking at markets that are local, that may or may not be true.  People want solid wood floors, but they go with Pergo due to convenience.  There's lots of factors to look at.  A lot of times they buy what they can afford. 

We had some biomass plants in PA, which have now been converted to natural gas.  Convenience.  Fewer employees, no need for trucks, ease of operation.  New energy production continues to be natural gas.  The same might happen to fuelwood markets.  You can never tell.

Never under estimate the power of stupid people in large groups.

CTYank

Quote from: beenthere on June 23, 2013, 10:18:33 PM
Okra
We are not harvesting the timber on millions of acres of Forest Service and BLM land now. So it stands, dies of old age or bugs, and burns.

I've heard our paper mills have been getting a lot of pulp from South America for 30 years or so. Demand controls.

Timber/pulp harvesting is NOT the only value of national forests. Even the USFS has determined some years back that sometimes air and water purification, and recreation are competitive.
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