The price of high-end mahogany raw materials falls, and the investment in Hongmu needs rationality.
The price of precious wood species has experienced a significant decline. Since May last year, the prices of rosewood raw materials have dropped, with both Siamese and Burmese rosewood falling by more than 20%. According to Mr. Liu, a store manager at a large redwood brand in Zhengzhou, high-end mahogany materials such as Siamese and lobular rosewood have seen sharp declines in the domestic market, averaging between 30% and 40%. As a result, the profit margins for mahogany furniture in retail stores have started to shrink. In response, some stores launched a “0 profit†promotion during the Spring Festival, but sales did not meet expectations. Many consumers are still waiting for further price drops.
The most dramatic drop has been in Siamese rosewood from Laos and Cambodia, with top grades falling from over 400,000 yuan per ton to around 250,000 to 280,000 yuan per ton. Similarly, lobular rosewood has also dropped by 30% to 40%, returning to levels seen in early 2013. According to Mr. Liu, the recent price slump is largely due to speculative activity in the previous two years, with many investors eager to sell their stocks. He added that the current domestic supply of mahogany raw materials is sufficient, and manufacturers have significant inventories, which means only a small portion of the stock is used for producing finished furniture. Therefore, it's unlikely that the price of precious redwood will rise in the short term.
A rosewood supplier revealed that in recent years, red rosewood prices soared to 1,000 yuan per kilogram, leading many manufacturers to stockpile the material without using it for production. With tighter access to capital, the market now faces an oversupply, forcing manufacturers who hoarded raw materials to sell at reduced prices.
The mahogany market is entering a phase of adjustment. According to a report on China’s redwood imports in the first half of 2014, import volumes surged, indicating strong domestic demand. The industry believes that the boom in the mahogany market has attracted a lot of investment, while rising raw material prices have driven up the need for imported redwood.
In the furniture industry, upstream price fluctuations typically take three to four months to reach the final consumer. This round of price drops is now being reflected in the sales of finished mahogany products, with profit margins shrinking by 5 to 8 percentage points. "This year, the market is in a downturn, and reducing prices is necessary," said Mr. Liu. He hopes this will help stimulate demand among middle- and high-income consumers.
Once processed into furniture, the price of raw materials is usually doubled. Most furniture currently on the market uses pre-price-drop materials, so finished product prices haven’t fallen much. However, furniture made from less expensive wood species is likely to see price reductions to align with market conditions. This shift could help bring the industry back to a more rational pricing model.
As anti-corruption efforts intensify, high-end luxury consumption in China has declined significantly, affecting the high-grade mahogany furniture sector. Meanwhile, more affordable options like Burmese rosewood have become popular among mass consumers. In the future, low-cost or budget-friendly mahogany is expected to dominate the market, with value-conscious buyers favoring these products.
With increased purchasing power among ordinary consumers, more families are spending over 100,000 yuan on furniture. Some mahogany dealers are now targeting this group, focusing on mid-to-low-end markets. A set of mahogany sofas can cost around 20,000 yuan, while a set of chairs may be priced near 10,000 yuan. In many solid wood furniture stores, sales staff often label cheaper pieces as "redwood" to attract buyers, even though they don't match the quality of premium woods like yellow pear or rosewood.
Mr. Liu noted that a leather sofa from a well-known brand might cost 20,000 yuan or more, while a set of hedgehog rosewood or chicken wing wood furniture costs around 30,000 to 40,000 yuan, with room for negotiation. Many consumers are choosing these options for their durability and value. With a wider variety of redwood species available, consumers now have more choices and stronger bargaining power compared to the past.
Looking ahead, the investment value of mahogany should be viewed rationally. While some industry experts believe the price decline will continue, others argue that the market is still active despite the drop. Although scarcity is increasing, it’s unlikely that the supply of mahogany furniture will disappear entirely. For example, Myanmar allows the export of processed timber and semi-finished furniture, and Vietnam follows similar policies. These measures aim to protect forest resources and boost the value of wood.
Both consumers and businesses must approach the investment potential of mahogany with caution. The domestic market currently suffers from limited distribution channels and high brand premiums. Many companies rely heavily on resource sales rather than innovation. While the scarcity of redwood resources is real, it’s risky to assume that the market will eventually dry up. With ongoing international policies, it remains uncertain whether mahogany furniture will be completely unavailable in the future. Therefore, treating it as an exhaustible resource carries significant risks.
Ipl Hair Removal,Hair Removal Portable,Portable Handheld Epilator,Intense Pulsed Light Hair Removal
Shenzhen Shengkang Electronic Technology Co.,Ltd , https://www.shk-beauty.com