Wood biomass trade continues strong growth in April

  • Bulk carriers discharged 6.3 MMT of wood chips and pellets in April, up 21% YoY, the highest ever level of monthly imports.
  • Generally used in biomass power generation, the biomass energy sector has experienced strong growth as countries transition away from fossil fuels and nuclear power.
  • In the Pacific, China and Japan are the main markets for these products. China imported 2.5 MMT in April, up 15.3% YoY. Most of these volumes came from Vietnam (48%) and Australia (26%).
  • To replace coal power generation, Chinese authorities have been pushing the use of biomass power. The China Biomass Energy Industry Promotion Association estimate that approximately 1.2 trillion yuan will be invested in biomass from 2021-2025, increasing its proportion in the country’s energy mix to 8% by 2030.
  • Japanese imports totaled 1.6 MMT in April, increasing by 1.7% YoY. Like in China, most of these volumes came from Vietnam and Australia.
  • The growth in Japan’s biomass energy sector has been driven by the country’s phase out of nuclear power. Multiple biomass projects are in development that should support continued growth in demand, including a 52.7MW plant in Fukuyama.
  • In the Atlantic, the UK is the biggest importer of wood biomass. It imported 617,000 tonnes in April, up 10.6% YoY. This was mostly from the US (55%) and Canada (28%).
  • According to the UK Office of National Statistics, biomass accounts for around 40% of UK renewable energy consumption.
  • A further 650,000 tonnes were imported by the EU in April, predominantly into Belgium and Denmark.

Chinese economic activity slows in April

  • Chinese industrial production fell by 2.9% YoY in April, according to the latest figures from the National Bureau of Statistics. This is down from growth of 5% in March. Manufacturing output also fell by 4.6% YoY.
  • The steel intensive automobile sector, which has been particularly hard hit by lockdown disruptions, saw production decline by 46% YoY.
  • Fixed Asset Investment slowed in April. FAI in Infrastructure increased by 6.5% YoY, compared to 9.6% in March, while FAI in Manufacturing increased by 12.2% YoY, down from 15.6% in March.
  • Shanghai’s authorities have announced that the city’s restrictions will be gradually lifted from May 21, with authorities eyeing a return to normality by mid to late June.
  • Key indicators for China’s property sector also fell in April. Sales by value fell 46.6% YoY, while initiated floor space for January-April was down 28% YoY. In response to the slowdown, authorities cut mortgage base rates for first-time buyers from 4.6% to 4.4% over the weekend, to stimulate property demand.