New Zealand\u2019s export log market remains relatively stable heading into October, with China continuing to provide consistent but unspectacular demand. Prices are holding close to recent levels, while lower inventories and steady daily consumption are helping maintain balance despite limited upward momentum.<\/p>\n
September export log settlements into China were generally around US$130\/m\u00b3, with attempts by some suppliers to push prices towards US$134\/m\u00b3 meeting limited buyer interest. Domestic log prices in China have edged higher, but trading margins remain narrow at around US$4\u20135\/m\u00b3.<\/p>\n
Daily log consumption at Chinese ports has recently been running at approximately 55,000\u201360,000 m\u00b3, broadly in line with August levels. Port inventories are estimated at around 2.4 million m\u00b3, roughly 90,000 m\u00b3 below July. While inventories are considerably lower than levels seen two years ago, market participants currently appear comfortable with available stocks.<\/p>\n
The approaching National Day holiday period in early October is expected to temporarily slow activity and allow inventories to rebuild. However, current stock levels and incoming cargoes do not indicate a major oversupply risk.<\/p>\n
For New Zealand forest owners, current export prices remain workable for forests located relatively close to ports, although transport costs continue to weigh heavily on operations more than 100 km inland. The absence of major price swings is nevertheless providing greater certainty across harvesting, transport and export operations.<\/p>\n
China's wider manufacturing environment has also shown some improvement. Recent manufacturing indicators have returned to expansion territory, while stronger industrial profitability and export activity have provided some support to timber demand. Currency movements have also helped Chinese exporters remain competitive in overseas markets.<\/p>\n
At the same time, China's growing competitiveness in processed wood products is becoming increasingly visible across the Asia-Pacific region. Chinese-manufactured LVL and other structural wood products have been gaining ground in markets such as Australia, where imported material can compete aggressively against domestic sawmill production.<\/p>\n
India offers higher prices but freight remains difficult<\/strong><\/p>\n India continues to provide an alternative outlet for New Zealand logs, although shipping economics remain the main constraint. Unlike the established China trade, where vessels can often secure cargo in both directions, ships serving India frequently need to reposition empty before loading in New Zealand. Freight costs can therefore be around US$25\/m\u00b3 higher than equivalent China routes.<\/p>\n Vessel availability is also limited, while arrival schedules can be complicated by bunkering requirements and repositioning voyages. New Zealand sawmills see firm domestic demand<\/strong><\/p>\n Domestic lumber demand remains comparatively strong in parts of New Zealand. Canterbury sawmills are reporting healthy sales and forward order books that are close to full. Reduced production capacity elsewhere in the country, including the loss of major sawmilling operations in Nelson and Northland, has redirected some demand towards remaining producers.<\/p>\n Lumber prices, however, have shown little movement despite continued increases in operating costs throughout the supply chain. Log prices themselves have changed relatively little over several years, meaning raw material costs have not been the primary driver of the sharp increase in residential construction costs seen over the same period.<\/p>","protected":false},"excerpt":{"rendered":" New Zealand\u2019s export log market remains relatively stable heading into October, with China continuing to provide consistent but unspectacular demand. Prices are holding close to recent levels, while lower inventories and steady daily consumption are helping maintain balance despite limited … Continue reading
\nSelling prices in the Indian market are currently around US$26\u201327\/m\u00b3 above comparable China levels. That premium can translate into stronger returns for exporters, but the advantage is partly offset by substantially higher freight costs.<\/p>\n
\nDemand and prices at Kandla remain relatively stable, although manufacturing and trading conditions have softened. Longer term, stronger trade flows between India and New Zealand could improve vessel availability and reduce some of the current freight disadvantage.<\/p>\n
\nProducers are increasingly questioning how long current price levels can be maintained as labour, energy, transport and other costs continue to rise.<\/p>\n