Chinese New Year starts in late January, and this is the Year of the Rabbit, specifically the ‘Water Rabbit’” There are 12 animals in the Chinese zodiac: Rat, Ox, Tiger, Rabbit, Dragon, Snake, Horse, Goat, Monkey, Rooster, Dog, and Pig. In Chinese culture, the rabbit is the luckiest of the 12 and symbolises energy, elegance, and beauty. The Water Rabbit stands for longevity, peace, and prosperity, meaning 2023 is predicted to be a year of hope.
So, what hopes do we have despite the rather sombre world’s economic forecast?
For one, the Chinese government has suddenly decided to abandon its strict Covid-19 restrictions and is re-opening to the world. This might initially result in a spike in Covid-19 infections, but one can expect the Chinese economy to improve fast, which will help to grow the demand for timber and wood products.
Another positive note is that most of the rough-sawn timber prices, for softwoods, in particular, have bottomed out, and, as far as we can see, new ‘normal’ price levels similar to pre-Covid-19 have been reached.
Distributors’ stock levels of finished goods are generally still high, but the demand usually picks up in spring when weather conditions improve. With most sawmills reporting very low inventories and longer lead times, one can expect that increased demand might be seen sooner than anticipated.
Sea-freight rates, too, have reached pre-Covid-19 levels, and we expect neither serious further reductions nor strong increases. Stable raw material prices and freight rates will help manufacturers and buyers of finished goods plan their purchases in Q1 and Q2.
Let’s hope that the Year of the Water Rabbit will bring peace and prosperity. Rest assured that all of us in Asia are ready to resume business!