That is according to Steve Walker, Principal of Terrafolia Advisory, who spoke exclusively to Wood Central after visiting a series of LVL manufacturing clusters in Linyi, Suqian and Guigang last week. And the production pivot, he says, is only part of the story. “What stands out most,” Walker said, “is the ability to produce high-quality structural products using young plantation logs.”

Part of that competitive edge is feedstock flexibility.

According to Walker, the mills draw on a wide species mix — domestic pine (Pinus massoniana), planted eucalyptus, New Zealand radiata and European spruce — with end customers specifying wood blends, quality grades and certification requirements before a board is cut. As a result, manufacturers can produce LVL on demand, at scale, to any dimensions worldwide.

It comes after Wood Central revealed that Chinese LVL arriving at Australian ports has surged 63 per cent in the ten months to October 2025, with new ABS data recording more than 205,000 cubic metres traded in that period alone. For Walker, the use of younger fibre, purpose-built infrastructure, and on-spec production means China can land product at costs that locals can only dream of.

For global forest asset managers, Walker says this represents a real opportunity.

The implication, he says, is simple: rotation length, fibre specification and market strategy are now directly linked. “Investors who focus on productivity optimisation and value creation, and who align forest resources with the growing demand for engineered wood, will be well positioned for the next phase of the industry,” Walker said. “The future of forestry will belong to portfolios that understand how fibre, manufacturing and markets are changing together.”

It comes as Walker last month set out the detailed case for how Australia’s plantation estate could be better deployed to meet exactly this kind of demand. His paper, A National Pathway for High-Productivity Forestry and Renewable Carbon Supply, published by the Rozette Institute, argues that Australia could double its plantation output without planting a single additional tree — through smarter rotation management, fibre alignment and productivity optimisation across existing estates.

Three product categories are under examination. Canadian softwood lumber faces review under antidumping order A-122-857 and countervailing duty order C-122-858 for all of calendar year 2025. Chinese certain hardwood plywood products — under antidumping order A-570-051 — and Chinese wooden bedroom furniture under order A-570-890 are included for the same period.

Commerce said it may limit the number of companies examined, selecting respondents through U.S. import data or quantity-and-value questionnaires. The data will be placed on the record within 5 days of the initiation notice, with respondent selection to follow within 35 days. For wooden bedroom furniture, quantity-and-value responses are due within 21 days; separate-rate certifications within 14 days.

The duty burden on Canadian exporters has risen sharply. Combined antidumping and countervailing rates climbed from 14.40 per cent under the fifth administrative review to 35.19 per cent under the sixth, and U.S. producers show no sign of backing off. Andrew Miller, chairman of the U.S. Lumber Coalition, said the duties target practices “designed by Canada to maintain an artificially inflated US market share for Canadian products and force US companies to curtail production, thereby killing US jobs.”

The Chinese furniture picture was equally difficult in 2025. The U.S. remains China’s largest wood furniture export market, absorbing 27 per cent of total shipments — but volumes fell 7.1 per cent to 129.4 million pieces, export value dropped 20 per cent to US$5.6 billion, and average unit prices declined 14 per cent to $43 per piece.

That is according to Nguyen Quoc Tri, Deputy Minister of Agriculture and Environment, who said Hanoi is focused on “diversifying export markets,” reducing dependence on major trading partners, building the ‘Vietnamese Wood’ brand, and expanding forest environmental services and the carbon market.

It comes as Vietnam’s wood exports hit a record $18.5 billion in 2025, up 6.6 per cent year-on-year, with the US taking more than $8 billion of that total. The pressure is mounting: as Wood Central reported this week, the US Department of Commerce has slapped a preliminary 196 per cent antidumping duty on Vietnamese hardwood plywood — a rate higher than the one applied to China.

Nguyen Quoc Khanh, newly elected chairman of VIFOREST, says the reckoning is overdue. “The US is applying inconsistent tariff policies, whilst the EU market continues to struggle with economic slowdown,” he warned — stressing that unless the sector invests in green production and modern technology, the government’s US$25 billion export target by 2030 is in peril.

Japan is Vietnam’s fastest-growing major market.

Exports there surged 23 per cent in 2025 to $2.153 billion — making it Vietnam’s second-largest destination for the first time — with China close behind at $2.086 billion. The US, Japan and China together now account for 80 per cent of Vietnam’s total wood export value, with Canada quietly emerging as one of its most important new markets, particularly for bedroom furniture.

According to Phung Quoc Man, HAWA chairman, Canada, Europe, the Middle East and India have yet to impose tariffs on Vietnamese wood, a window Hanoi is now moving fast to exploit. Europe is already responding: exports to Spain jumped 63 per cent year-on-year as buyers scrambled to replace Chinese and Russian suppliers, with Germany also gaining ground under the EU-Vietnam Free Trade Agreement.

Underpinning the entire push is a green transition that Vietnam is further ahead on than most observers realise. The country has already sold 10.3 million forest carbon credits to the World Bank, banking $51.5 million, with a domestic carbon trading exchange now live under Decree 29/2026.

So far more than 520,000 hectares of planted forest carry FSC certification — with the government targeting one million hectares by 2030, the compliance threshold European buyers now require under the EU Deforestation Regulation before they will sign a purchase order.

It comes after Iran’s Revolutionary Guard issued a warning on February 28 to every vessel in the Strait of Hormuz: the waterway was closing, and any ship attempting to pass would be set “ablaze.” By the following morning, traffic was down 80%…with the strait closed to all vessels on Monday.

As it stands, 170 containerships carrying 450,000 TEU, 1.4% of the global container fleet, are stranded inside the strait with no clear path out, according to Linerlytica co-founder Hua Joo Tan.

All four of the world’s largest container shipping operators have suspended operations. Maersk has formally invoked Clause 20 of its Bill of Lading — a force majeure provision — implementing an Emergency Freight Increase across all cargo to and from the UAE, Qatar, Saudi Arabia, Bahrain, Kuwait, Iraq, and Oman.

The current crisis is structurally different from anything the world has faced before. When Houthi attacks forced vessels off the Suez route in 2024, the Cape of Good Hope was painful but passable. However, a Hormuz closure removes the destination, leaving no available detour.

What is at stake in the Gulf

The MENA region has, in recent years, become one of the most important and consequential growth markets for timber exporters. Last year, Wood Central reported that Russia shipped 1.7 million cubic metres of lumber there in 2024, whilst the American Hardwood Export Council has successfully grown trade in the United Arab Emirates (up 27%), Saudi Arabia (up 8%) and Egypt (up 15%) on the back of major projects in the region.

However, that pipeline is now stalled at the port gate.

“The Persian Gulf, Strait of Hormuz and adjacent waters are the most dangerous place right now for commercial shipping,” according to Jakob Larsen, BIMCO’s Chief Safety and Security Officer, who spoke to Fox News on Sunday. “Ships in the Persian Gulf are under threat from Iranian attacks — they’re trying to depart to get away from the threat zone.”

It is a pattern that timber exporters have felt before.

During last June’s 12-day Israel-Iran war, Mike Cardin, of Tennessee-based Cardin Forest Products, was one of scores of traders who had rerouted Gulf-bound hardwood shipments. “If it keeps escalating, there won’t be any orders coming in for the next, who knows how long,” he told Fox Business at the time. Whilst his brother Jarrod was more blunt: “Right now, no one knows what’s going to happen. It’s shut down that export market pretty much. It’s a little painful — we’re stuck with warehouses full.”

That conflict passed within two weeks…but this one could drag on much longer.

Finland, Russia, and the wider exposure

The current disruption reaches beyond Gulf-facing exporters. “Approximately 20% of the forest industry’s exports go to Asia, and the majority of those shipments pass through the Suez Canal,” said Maarit Lindström, Director and Chief Economist at the Finnish Forest Industries Federation. If vessels are forced to reroute around southern Africa, journeys extend by thousands of kilometres — delays of several weeks are possible.

“If the situation continues, it will affect freight prices and competition for containers,” Lindström warned. Of Finland’s Asian exports, roughly half is pulp, with wood products accounting for 26%, cartonboard 15%, and paper 8% — all product lines now facing extended transit times and tightening container availability. Finland exports approximately €3 million worth of forest products to Qatar alone each year.

Until last week, freight markets were recovering after two years of major instability in the region. A Red Sea return in late 2026 had been one of the few tailwinds analysts were counting on — lower rates, shorter transit times, freed-up capacity. “The repercussions of the joint military operation will see the further weaponisation of trade and shatter hopes of a large-scale return of container shipping to the Red Sea in 2026,” said Peter Sand, chief analyst at Xeneta.

And there is a second cost that the mainstream has largely missed. QatarEnergy halted production following attacks on its facilities, sending gas prices up 50% in two days. With the Strait carrying 22% of global LNG, Asian based sawmills running on gas could face an energy cost spike on top of the freight hit.

“Keruing timber is low maintenance, hardwearing and ideal for outdoor furniture use,” according to WoodSolutions – Australia’s go-to resource for technical information, with the strong and durable wood used in various applications.

“Common uses include internal flooring, protected framing and boards, internal joinery and mouldings, lining, panelling and framework. (Whilst) preservative-treated material is (also) used for poles, piles, sleepers and cross-arms. It is often used as a cheaper alternative to oak for heavy construction, decking, vehicle building and sleepers, and in plywood.”

Keruing is a hardwood native to South East Asia and used in a wide variety of internal and external applications – according to WoodSolutions.

Used by the US Military in floorboards, tanks, and vehicles, the Malaysian supply chain is concerned that the United States (and the European Union) are behind a renewed push to add the timbers to the CITES Appendix II list.

It comes as Wood Central last year reported that the US Hardwood Federation has lobbied the Trump administration to replace Keruing (and Apitong) with American Red oak, arguing that new prototypes last five times longer than tropical timbers.

“As part of this shift, the National Defense Authorization Act has now classified Apitong as endangered and calls for a transition to domestically sourced Red Oak for trailer beds and vehicle floorboards. Congress (has already) emphasised that Apitong, sourced from tropical rainforests, is unsustainable. A bipartisan group of senators has urged the Department of Defence to accelerate the switch, citing Red Oak’s environmental benefits,” according to a US Hardwood Federation letter to the US Fish and Wildlife Service last year.

According to the EU, more than 5.3 million tonnes of Meranti timber products –sold as mouldings by Australian merchants – have been sold in the world over the decade to 2023 – with overharvesting to meet high demand the primary reason that 65% of species are threatened, and 86% have seen declining numbers: “This raises serious questions about the future availability of these species and the need for stronger trade controls,” according to a spokesperson who spoke of the push to add the species to the CITES listing last year.

Last year, Wood Central today spoke to an expert connected to the supply chain who said the push to add Keruing (and Apitong) to the CITES list could have major implications for the Australian supply of much-needed construction materials – given the push by the Victorian, WA and (now) NSW state governments to lock up supply of hardwood timbers:

“At a time when the United States is freeing up production of its forests, Australia is locking ourselves out of our resource. This leaves our supply of plywood, mouldings, sleepers and other timber products vulnerable and almost entirely reliant on tropical timber from Asia.”

A timber expert, who spoke to Wood Central about the impact of the CITES decision on Australia’s supply of timbers used in plywood, mouldings and sleepers.

• To read more about the impact of the CITES ruling on the global supply of tropical timbers, click here for Wood Central’s feature.

It comes as new data collated by Lesprom Analytics shows that log imports dipped 13.1% to 31.38 million cubic metres, marking the fourth straight year of decline, with volumes now standing at about half the Covid-peak levels of 63.57 million cubic metres in 2021.

Log exports barely registered, dropping from more than 12 thousand cubic metres in 2024 to just 3.68 thousand cubic metres last year, while the value of log imports crashed 21.9% to US $4.8 billion, as the average price of logs fell 10.1% to just US $153 per cubic metre.

Chinese construction activity is in less timber-intensive industries

According to PF Olsen’s latest Wood Matters report, published last week, whilst infrastructure fixed asset spend in China has stayed positive, spending in transport, utilities, and urban renewal is far less timber-intensive than residential construction.

“This has contributed to the relatively stable baseline demand but will never replace the peak demand during the construction boom,” according to Scott Downs, PF Olsen’s General Manager of Marketing and Sales, who said log inventories at ports sat at about 2.8 million cubic metres following the Chinese New Year, with daily pine log port offtake steady at around 55,000 cubic metres — far below the 60,000 cubic metre norms reported throughout much of 2024.

And whilst stockpiles of New Zealand radiata pine grew (rising 2% to 18.2 million cubic metres or 58% of total imports), alongside Canada (up 12% to 1.33 million) and Japan (up 4% to 1.71 million cubic metres), many other suppliers weren’t so lucky. Imports from Papua New Guinea fell 23% to 1.60 million cubic metres, and the Solomon Islands dropped 31% to 1.09 million cubic metres.

Russia — where a ban on unprocessed softwood and hardwood log exports took effect in January 2022 — was still shipping logs but at much reduced volumes, down 14% to 1.23 million cubic metres. Germany’s shipments fell off a cliff — down 46% to 0.76 million cubic metres.

Tropical logs copped the worst of it

China Customs data shows tropical log volumes dropped 27% to 5.063 million cubic metres in 2025. Much of the decline is structural — a growing number of producing countries, led by Papua New Guinea, now require permit holders to process timber domestically before export, while growing awareness of tropical forest protection among Chinese consumers has further eroded demand.

Wood Central earlier this month reported that China’s softwood lumber imports have now halved from their pre-pandemic peak, falling 12% in 2025 to just 14.6 million cubic metres — the third consecutive annual decline, with housing starts now 64% below the 10-year average. More than 78% of lumber arriving at Chinese ports now comes via Russia and Belarus, with imports from the United States falling 39% to 134,000 cubic metres and Finland down 22% to 440,000 cubic metres.

At the time, Wood Central reported that The Economist had warned China’s property crisis could drag on into 2030, noting that new-home sales had tumbled from more than half of all transactions in 2022 to just 26% in 2024 — and continued to fall across 2025. Morningstar’s latest China real estate report, published this quarter, doesn’t expect a rebound until 2027.

To learn why China is looking to take far fewer logs over the long term, click here for Wood Central’s exclusive interview with Rudolf van Rensburg, co-author of China – Forest, Log & Lumber Outlook in June 2024.

Starting from later today — March 2, 2026, the date the notice was published in the Federal Register — US Customs and Border Protection will begin suspending liquidation and collecting cash deposits at the applicable rates after Commerce found that hardwood and decorative plywood from China was sold in the United States at less than fair value between October 2024 and March 2025.

The duties land on top of the 81.34% preliminary countervailing duties Commerce announced in January, according to the Coalition for Fair Trade in Hardwood Plywood, meaning Chinese plywood now faces combined preliminary duties of around 267%.

“This decision by the Department of Commerce is another critical step in levelling the playing field for American hardwood and decorative plywood manufacturers,” according to Timothy C. Brightbill, lead counsel to the Coalition and co-chair of Wiley’s International Trade Practice. “The domestic industry has been harmed for decades by dumped and subsidised hardwood and decorative plywood.”

Commerce also made a preliminary finding of critical circumstances for the China-wide entity, which means duties will be collected retroactively on affected unliquidated entries made on or after December 2, 2025, 90 days before publication of the notice.

Wood Central understands that the China-wide entity includes Linyi Evergreen Wood Co., Ltd. and Xuzhou Shelter Import and Export Co., Ltd., among other non-responsive producers and exporters. Commerce said it relied on adverse inferences after the selected respondents failed to respond to its antidumping questionnaire — a move that effectively guaranteed the highest possible duty rate.

But if Chinese plywood has all but vanished from the US market, the question is: where is it all coming from now?

Vietnam and Indonesia step in

Last year, Wood Central reported extensively that China had been using “friendly actor” countries — particularly Vietnam, Indonesia, and Malaysia — to circumvent federal antidumping laws and funnel huge volumes of plywood into the US supply chain. That pattern is now embedded in the data.

As it stands, the United States imported about 3.23 million cubic metres of hardwood plywood in 2025 — up 20% year-on-year — with Vietnam supplying up to 30% of the total share, or 980,000 cubic metres (up 33%), and Indonesia shipping 891,000 cubic metres (up 40%), or 28%. Together, the two countries now account for nearly 60% of all hardwood plywood entering the US — a market China once dominated.

And whilst Chinese trade has declined, Malaysia and Thailand posted the fastest growth among the top suppliers, with volumes rising 65% to 133,000 cubic metres and 70% to 108,000 cubic metres, respectively. Cambodia delivered 171,000 cubic metres (up 22%), Finland surged 186% to 84,000 cubic metres, and Italy rose 112% to 66,000 cubic metres. Canada slipped 17% to 183,000 cubic metres, Spain fell sharply — down 64% to 96,000 cubic metres — and Russia shipped 178,000 cubic metres, up 3%.

By species, birch plywood totalled 1.71 million cubic metres, followed by non-tropical hardwood plywood at 1.17 million cubic metres and tropical plywood at 332,000 cubic metres. Over the period 2019–2025, annual import volume ranged from 2.71 million cubic metres in 2024 to a peak of 5.30 million cubic metres in 2021 during the COVID-era construction boom, with the average import price moving from US$439 per cubic metre in 2020 to US$743 last year.

Now, Vietnam and Indonesia are also in the firing line

And that’s exactly where the next battle is being fought. Commerce didn’t just go after China — it set preliminary dumping margins of 19.98% to 84.94% on Indonesian imports and a punishing 196.14% on Vietnamese imports, a rate even higher than China’s. Those duties add to the countervailing duties announced in January, which ranged from 2.40% to 128.66% for Indonesia and 4.37% to 26.75% for Vietnam.

The Coalition for Fair Trade in Hardwood Plywood — whose members include Columbia Forest Products, Commonwealth Plywood, Manthei Wood Products, States Industries, and Timber Products — filed its petition in May 2025, alleging dumping margins as high as 474% for China. The US International Trade Commission sided with the domestic industry in July last year, finding a reasonable indication that imports from all three countries were materially injuring US producers.

Commerce plans to issue its final determination for China by May 10, 2026, after which the ITC will decide whether the US industry was materially injured. Final determinations for Indonesia and Vietnam are expected by mid-July 2026. If both Commerce and the ITC reach affirmative final determinations, antidumping and countervailing duty orders will be issued for a minimum of five years.

With China’s volumes already at rock bottom, the real question now is what happens to the nearly 1.9 million cubic metres flowing in from Vietnam and Indonesia — the two countries that stepped in to fill the gap and are now squarely in Commerce’s crosshairs.

• To learn more about the flood of plywood from China, Indonesia, and Vietnam entering the US supply chain, click here for Wood Central’s special feature.

On a 12‑month basis, mills produced 6.95 million cubic metres of lumber, with shipments leaving Japanese ports standing at 591,000 cubic metres for the month — down 7.8% from December and 5.3% year on year — while ending inventory came in at 1.08 million cubic metres, down 8.1% month on month and 15.8% year on year.

The new data comes after Wood Central last month reported that Japanese housing starts fell 6.5% in 2025, extending a decline that has pushed new‑build volumes to less than half the levels from the early 1990s. Japan built just 740,667 homes last year — 16% below the 10‑year average of 883,184 units. And while the share of wooden homes has been climbing — with five of the past six months recording 60% or more timber‑frame construction — total volumes of wooden houses still fell 4% across the year.

At the same time that the domestic market is in decline, Japanese mills and fabricators are looking offshore to fully commercialise their timber technologies. Speaking to Wood Central’s Jason Ross at last year’s Timber Construct conference in Melbourne, Yuichi Shinohara, managing director of the Shinohara Group, and Shingi Tarirah, the company’s structural coordinator, said Japan’s “click and set” prefabrication systems could help fix Australia’s housing shortfall.

As one of Japan’s largest timber fabricators — responsible for fabricating 4,000 or more timber frames every year — Tarirah said the company’s patented pre‑cut technology is highly efficient and much safer than other methods. “We just need to find the right local supply partner to bring the technology to the Australian market,” Shinohara said.

Despite the production slump, Japan remains a prized destination for foreign lumber. Earlier this month, Wood Central reported that Japan — not China, South Korea or even India — is Canada’s top target for lumber exports, with its shift from single‑family homes to multi‑storey timber buildings creating ideal conditions for Canadian forest products. “Japan gives the highest possible return to the industry in terms of the value of the lumber they import,” said Bruce St. John, president of the Canada Wood Group. “They import our traditional products, and we make products that are specific to their market.”

• To read Wood Central’s coverage of Japan’s housing starts and the Shinohara Group’s offshore push, click here for Wood Central’s special feature.

The review, announced by the International Trade Administration as part of a broader initiation notice covering multiple trade orders, names Hunchun Xingjia Wooden Flooring Inc. and Zhejiang Longsen Lumbering Co., Ltd. as companies subject to examination.

Under the agency’s process, respondent selection may be limited to a subset of firms, determined either from U.S. Customs and Border Protection (CBP) import data or from quantity‑and‑value questionnaires issued to exporters. The CBP data or questionnaire responses will be placed on the record within 5 days of the notice’s publication, and the Commerce Department aims to select respondents within 35 days. Interested parties will have seven days to comment once the data are posted, followed by a five‑day window for rebuttal submissions.

The Department also noted that reviews may be rescinded where there are no suspended entries for a company or where entries were not made under the firm’s specific case number. Producers or exporters listed in the initiation notice may notify Commerce within 30 days if they had no exports, sales, or entries during the period of review. In addition, parties that requested a review may withdraw their request within 90 days of publication.

“Lenders are refining appraisal models to reflect shorter construction schedules, lighter foundations, and lower embodied carbon,” according to Danny Kontos, analysis publisher. “That reduces carrying costs and improves loan serviceability.”

“Construction cost inflation has squeezed contingencies and increased project risk…and at the same time, steel and concrete price volatility complicates bids,” he said. “(But) timber can mitigate some exposure by using domestic species, improving logistics predictability, and trimming time on site.”

The shift in Japanese construction is already occurring in the Kyushu province

And that shift is especially visible in Kyushu, home to some of Japan’s most productive sugi (cedar) and hinoki (cypress) forests and supported by a dense network of sawmills, cross‑laminated timber and glulam plants. “And whilst non‑residential timber buildings are rising in Kyushu…there is a shortage of trained engineers and contractors for larger, complex projects.”

“The near‑term pipeline skews to 3–8 floor offices, clinics, schools, and logistics facilities. Many designs use hybrid timber‑concrete solutions to meet seismic and fire requirements while capturing carbon and schedule benefits,” Meuka said. “Public‑sector owners are also exploring procurement rules that value life‑cycle emissions. These attributes make mass timber in Japan a practical route to decarbonised construction while balancing cost and compliance.”

Earlier this month, Wood Central reported that Japan — not China, South Korea or even India — is Canada’s top target for lumber exports, with its shift from single‑family homes to multi‑storey timber buildings making it a prime market for Canadian forest products. “Japan gives the highest possible return to the industry in terms of the value of the lumber they import,” according to Bruce St. John, the president of the Canada Wood Group. “They import our traditional products, and we make products that are specific to their market.”

• To learn more about the Japanese push to build more with timber and the unique pre-cut systems deployed to speed up housing, click here for Wood Central’s special feature.