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Södra reduced the price of its softwood pulp timber by SEK 25 per m3sub. This price reduction is also applicable to the pulp timber element of its storm range. The price of all hardwood pulp timber ranges will remain unchanged for the time being, however.

"This price reduction is a reaction to the prevailing demand, and there is plenty of raw material available at all Södra pulp mills," said Håkan Svensson, Director of Forestry at Södra.

As part of FLEGT Asia’s information collection role, a number of forest governance, markets and trade Baseline Studies have been carried out in the region. This study is done for China.

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Keywords: International forest products markets, c. National Policy & Legislation, e. Deforestation & Degradation Drivers, Other Publications, Asia, China, EU, FLEGT, market, timber, VPA

Over recent weeks, export log markets have continued to react to oversupply with inventories building and softening prices. This situation of supply being well out of balance with demand is now very pronounced in China and India, and to a lesser extent in Korea and Japan. Irrespective of whether the primary reasons are due to high inventory/slowing demand or pricing being indexed to China, domestic log and processed product prices have decreased across all markets and general trading conditions have become far more challenging than earlier in the year.

Södra's profit for the first half was 577 million SEK (1084 million in the same period last year) representing a return on capital of 11 percent (21). The lower operating income at -507 million is explained due to 15 percent higher wood costs that affect earnings negatively by 624 MSEK. - The exception was the sawmill industry, where the market is in a deep slump, but the conditions in the first half was good, says CEO Leif Broden. The turnaround for new construction is delayed in the U.S. and Europe.

High inventory levels in Chinese ports have now converted to a lowering of in-market (CFR) pricing for New Zealand logs. A similar situation occurred this time last year when China was importing what were then record volumes of logs. In the January to April 2011 period China imported over 9 million cubic metres of softwood logs which was 33% more than the same period in 2010. Prices in 2010 peaked in April at just over US$140/JASm3 for a KS log. In 2011, prices appear to have peaked in May at close to US$160/JASm3.