The national standard of "General Technical Conditions for Hardwood Furniture" was recently approved and announced, and will be officially implemented on August 1 this year. It is understood that the previous hardwood furniture standard has been in effect for 11 years, but many standards were not clear, resulting in chaos in the hardwood furniture market. Regarding the introduction of the new national standard, although industry insiders generally consider it a step forward, it was not the main reason for the drop in hardwood prices at the end of last year, nor will it have a direct impact on future market prices.
From the end of last year to the beginning of this year, the price of hardwood markets fell to some extent. Many people believed that the recently introduced "General Technical Conditions for Hardwood Furniture" (hereinafter referred to as the new hardwood national standard) brought more types of wood into the category of hardwood, thereby affecting the prices of precious woods, leading to an overall decline in hardwood furniture prices.
For this purpose, the reporter visited the hardwood furniture market and interviewed relevant individuals who believed that the price of hardwood furniture is related to factors such as the price of raw materials themselves, production and manufacturing costs, and the market environment. The increase in the number of hardwood species only expanded the scope of hardwood species and does not directly affect hardwood prices.
Increase in hardwood varieties to over a hundred
The reporter saw that the original "Hardwood National Standard" classified 33 types of hardwood into five genera and eight categories, and stipulated that products in dark-colored hardwood furniture made from materials conforming to national standards are called hardwood furniture products, limiting the definition of hardwood furniture products and the scope of primary materials. This newly issued "General Technical Conditions for Hardwood Furniture" mainly includes ten contents such as the scope, terms, definitions, requirements, quality disclosure, testing methods of hardwood furniture. This standard clearly defines and standardizes the definition of hardwood furniture for the first time, increasing the number of wood species from 33 to over a hundred, greatly expanding the range of hardwoods, and stipulating that hardwood furniture should be named and labeled according to the botanical name of the main wood used in the product. Unlike the restrictions on tree species imposed by the old national standard, the new national standard advocates the development and use of new types of hardwood materials and stipulates that wood must be tested before production.
In addition, the new national standard also clearly stipulates that each piece of hardwood furniture must come with an identity card, namely the "Quality Disclosure Card for Hardwood Furniture Products." It is understood that currently, the hardwood furniture sold in the market only has simple markings for the size and materials of the furniture, without a unified and standardized marking. Therefore, many merchants exploit this loophole, selling fake goods and mismatched products. The new national standard stipulates that hardwood furniture products must be accompanied by an identity card, requiring clear labeling and a unified specification. If consumers find mismatches in the product, they can use the identity card as evidence for complaints and claims.
Not all varieties have fallen
Regarding the varying degrees of decline in hardwood prices that began at the end of last year, Wu Shaohua, President of the Shanghai Collectors Association, analyzed that the primary reason is the macroeconomic climate. Not just the hardwood market, almost all artworks experienced adjustments in the second half of last year; secondly, there was too much speculation in the hardwood market in the first half of last year, with stockpiling phenomena, especially a significant price bubble in golden nanmu wood, posing considerable risks; additionally, the rapid emergence of many substandard hardwood manufacturers in the first half of last year affected the supply of raw materials and changes in supply-demand relationships.
Wu Shaohua told reporters that not all hardwood varieties experienced price declines at the end of last year. For example, prices of huanghuali, small-leaf rosewood, and big red sourwood remained relatively stable. Varieties with larger declines were often newer ones, such as red sandalwood, while traditional rare materials did not experience significant drops. Currently, the hardwood raw material market is relatively calm, with big red sourwood priced at about 100,000 to 120,000 yuan per ton, and large-leaf rosewood priced at around 140,000 to 180,000 yuan per ton.
Limited effect of the new national standard
Hardwood raw materials and furniture have preservation and appreciation functions, but behind their dramatic price fluctuations, there is always a shadow of speculation. Will the introduction of the new national standard curb the chaos in the hardwood furniture market and thus regulate the hardwood furniture market? An unnamed insider in the industry believes that the introduction of the new national standard is an adjustment to the hardwood standards in response to market development. Its purpose is to make the market more standardized and allow the industry to sustainably develop. It has a certain role in regulating the hardwood furniture market, but its enforcement in the market will be difficult because there are many fake hardwood furniture pieces, and there are not enough experts to conduct evaluations. Since hardwood itself is quite difficult to define, standardizing the hardwood furniture market is not something that can be achieved simply by introducing a new national standard.
This insider also stated that the introduction of the new national standard has little impact on the price of hardwood furniture. The high or low price of hardwood furniture is mainly related to factors such as the price of raw materials themselves, production and manufacturing costs, and the market environment. The upcoming implementation of the new hardwood national standard increases the number of wood species from 33 to over a hundred, merely expanding the scope of hardwood species. The expansion of its scope cannot change the scarcity of some high-end woods. For instance, the total amount of precious woods like rosewood, huanghuali, and red sandalwood is gradually decreasing, making them increasingly valuable. The introduction of the new national standard does not affect their scarcity.
Cautious approach to hardwood investment
Regarding the trend of the hardwood market this year, Wu Shaohua believes that the prices of hardwood raw materials and furniture fell by more than 20% at the end of last year, which belongs to short-term fluctuations and is relatively normal. Even if the art market in 2012 is not optimistic, neither the raw materials nor the furniture prices in the high-end hardwood market will experience significant fluctuations, let alone the big ups and downs similar to those in 2007 and 2008. Because there are limited amounts of rare raw materials, general collectors will not easily sell. Additionally, due to the remarkable preservation and appreciation effects of high-end hardwood furniture, its consumer base continues to grow.
However, if one wants to achieve stable and higher returns, the holding period should exceed five years. Wu Shaohua indicated that as an investment type, hardwood has few channels for liquidation, and it is not easy to quickly dispose of it. Currently, the liquidation of hardwood furniture is still dominated by transactions between collectors and within the industry. Auctions of hardwood furniture are mostly for high-end antique hardwood furniture, which has certain limitations. The proportion of manufacturer buybacks is also small. Moreover, the non-standardization and high prices of hardwood also restrict the scale of online transactions. Given the limited and slow liquidation channels for hardwood raw materials and furniture, ordinary investors should cautiously approach hardwood investments.