In May 2020, the response to public health emergencies in Beijing has been reduced from Level I to Level II. The National People's Congress and the Chinese Political Consultative Conference ( NPC & CPPCC )have been held successfully. Chinese enterprises have basically returned to work and production, and the macro-economy has maintained the momentum of recovery growth.
The GGSC-CN comprehensive index for May registered 56.1% (51.5% for last May and 57.5% for May 2018), a decrease of 4.3 percentage points from the previous month, continued to run in the expansion zone for 3 consecutive months. It shows that the operation of the superior forest products enterprises represented by GGSC-CN index expand from last month. See Figure 1 for more details.
According to the sub-index, domestic market demand has kept picking up, manufacturers for forest products have maintained stable production, and employment has been relatively stable. But the international market is still depressed, business inventory continues to be consumed.
Figure 1 Trends of GGSC-CN index and Chinese national PMI index from June 2019 to May 2020
Challenges and suggestions
Ø The epidemic situation in Northeast China is relatively serious. Oak log and ash log are in short supply.
Ø Logistics distribution is not smooth.
Ø International transport has not opened, it’s hard to import accessories.
Ø Tight supply of Juglans Nigra..
Ø Disrupted logistics and distribution.
Products in short supply
Juglans Nigra, Hickory, Oak
Commodity of which the price has been increased
Phenol, Oak, Manchurian Ash, Veneer（Poplar Veneer）, Water-Proofing Agent, Juglans Nigra, Hickory Floor Blank, Carbamide,Methanol, Melamine, Paraffin Wax
Commodity of which the price has been decreased
Melamine, Eucalyptus Wood, Pine Wood, Fibreboard, Ebony, Oak, Teak Floor Blank
As for the GGSC-CN index, in May 2020, three out of five sub-indexes of GGSC-CN index declined, one rose and the other flat.
The production index registered 66.7%, a decrease of 11.9percentage points from the previous month, continued to run in the expansion zone for 3 consecutive months. It shows that the production of superior forest products enterprises represented by GGSC CN increased in May from last month.
The new order index registered 66.7%, a drop of 4.7 percentage points from the previous month,reflecting the ability to obtain orders is better than last month. Among them, the new export order index reflecting international trade registered 27.8%, a decrease of 13.5 percentage points from the previous month, and continued to run in the shrink zone for 3 consecutive months , showing that orders from abroad this month decreased from last month.
The main raw material inventory index registered 27.8%, a decrease of 0.8 percentage points from the previous month. It shows that the raw material inventory of the superior forest products enterprises decreased from the previous month.
The employment index registered 50.0%, same as the previous month. It shows that the employment of the superior forest products enterprises was almost the same as the previous month.
The supplier delivery time index was 44.4%, an increase of 1.6 percentage points from the previous month. It indicates that the supply time of raw material suppliers of the superior forest product enterprises was longer than last month.