Lately, an official of the Agricultural Product Department of Dalian Commodity Exchange (DCE) said in an interview on the selection of the delivery places for the “two boards” that the warehouses in Guangdong Province are set as the standard warehouses and those in Tianjin, Zhejiang Province, and Jiangsu Province are set as the non-standard delivery places for fiberboard with the premium of RMB 5 per piece; the warehouses in Zhejiang and Jiangsu are set as the standard delivery warehouses for blockboard with the discount in Tianjin of RMB 10 per piece and that in Hebei Province, Shandong Province, and Guangdong Province of RMB 20 per piece. Such a design has taken full account of such factors as the deliverable amount, the logistics nodes, the circulation radiation capacity, and the representativeness of the price, so as to ensure the smooth operation of the delivery.
It is introduced that the fiberboard producing areas cover a wide span and Guangdong Province, Guangxi Province, Shandong, and Jiangsu are the major fiberboard producing areas in China, the output of which accounts for 50% of the total amount. Shandong and Jiangsu have more available wood processing residues and fast-growing woods; and Guangdong and Guangxi are most abundant in fast-growing woods resources. The fiberboard also has widespread consuming fields, mainly including the furniture manufacturing (taking up about 60%) and the composite door plank and laminate flooring. In recent years, the Yangtze River Delta, the Zhujiang River Delta, and the Bohai Rim in China have gradually formed a manufacturing base of furniture, wood doors, and floor boards and become the major consumption areas for fiberboard. Statistics show that the fiberboard consumption amount in Jiangsu, Zhejiang, and Shanghai in the Yangtze River Delta takes up about 26.5% of the total in China; that in Guangdong Province takes up about 24.2%; and that in Shandong, Tianjin, and Beijing in the Bohai Rim accounts for 26.6%. The consumption amount of the above three areas exceeds 77% of the total, making them the major fiberboard consumption areas in China.
At present, the intermediate-trade-oriented trading mode has been formed in China’s fiberboard industry, taking up 70% of the total sales volume; and the point-to-point trade takes up about 30%. Of all transaction, motor transport takes up 70% with the transportation radius of no more than 500km and most are trans-provincial trade with neighboring provinces.
With regard to the trade flow, part of the surplus production in North China and East China is flowed to the Bohai Rim; the surplus production in East China and Central China to the Yangtze River Delta; and that in South China, Central China, and southwest areas to the Zhujiang River Delta. In terms of the flowing provinces, the top three provinces with the largest outflow volume are Guangxi, Henan, and Hebei, taking up 24.5%, 16.8%, and 14.6% respectively of the total circulation amount; and the top three provinces and city with the largest inflow volume are Guangdong, Zhejiang, and Shanghai, taking up 36.7%, 16.5%, and 12.1% respectively of the total. At present, some distributing centers have been formed in brisk-trading areas, such as Guangzhou and Dongguan in the Zhujiang River Delta, Hangzhou, Jiaxing, and Changzhou in the Yangtze River Delta, and Tianjin in the Bohai Rim. And large numbers of traders have clustered in the major consumption areas.
As there is no difference in fiberboard technology, the major difference in prices among all regions mainly reflects the different material cost and the price relation is relatively stable with the same fluctuation trend. Judging from the industry distribution, the raw material in East China and North China is mainly poplar and that in South China is mainly eucalyptus. As the wood transportation cost is relatively high, the raw material purchase of 60% fiberboard manufacturing enterprises in China is restricted within 200km. As the raw material cost of eucalyptus is relatively lower, the price in Guangdong is the lowest, about RMB 5 per piece lower than that in Jiangsu, Zhejiang, and Tianjin. Therefore, DCE has chosen Guangdong as the standard delivery place and set the premium of RMB 5 per piece in Zhejiang, Jiangsu, and Tianjin.
The official also introduced the design of delivery place for blockboard. The trading object of blockboard futures is core-board. East China is the important producing area and the largest selling area of core-board and Hebei, Shandong, Jiangsu, and Zhejiang are the top four provinces in China with the largest core-board production (taking up 51% of the total). Langfang in Hebei, Linyi in Shandong, Pizhou in Jiangsu, and Jiashan in Zhejiang are the major industry clusters in China; Hangzhou in Zhejiang, Changzhou in Jiangsu, Tianjin, and Guangzhou and Dongguan in Guangdong are the major trading centers, taking up 70% of the total sales volume in China.
The official also said that the blockboard has a clear logistics flow and the same trading mode and transportation cost with the fiberboard. The surplus production in North China is flowed to Liaoning, Beijing, and Tianjin; that in East China to Shanghai; and that in Mid-South area to the Zhujiang River Delta. In terms of different provinces, Zhejiang takes up large proportion both in production volume and sales volume. As the storage cost takes up a large proportion in the board price, spot enterprises usually choose areas surrounding big cities for storage. In selecting delivery places, DCE has considered the practice of spot enterprises and set Hebei, Shandong, Jiangsu, Zhejiang, Tianjin, and Guangdong as the delivery areas.
Due to the increase of labor cost and raw material cost, the core-board in the Yangtze River Delta presents the highest price. North Jiangsu, Shandong, and Hebei, with the advantage of industry transfer and the relatively lower labor cost, and Guangdong, with the relatively lower raw material cost, all present lower prices than the Yangtze River Delta. As the price of core-board is restricted by the purchase radius of raw material and the transportation cost, the price difference among wide regional span is within the difference in transportation cost. Most transactions are between neighboring provinces and little core-board circulation among wide regional span has been seen, thus leading to the relatively stable price difference among different regions. Given that the artificial board is a demand-oriented industry, Zhejiang and Jiangsu, as the largest selling areas and the important producing areas, have larger price influence. Therefore, DCE has set Zhejiang and south Jiangsu as the standard delivery places with the discount in Tianjin of RMB 10 per piece and that in Hebei, Shandong, north Jiangsu, and Guangdong of RMB 20 per piece.