The At Wharf Gate (AWG) prices for New Zealand exported logs increased an average of $7 in January and $27 in February. The large AWG price increase in February was due to a combination of increased sale prices in China, an easing of shipping costs and a weakening of the NZD against the USD. The CFR sale price in China that bottomed at 130-135 USD per JASm3\u00a0for A grade in December, is now above 160 USD in late February. Shipping costs, however, are also rising again.<\/p>\n
The February PF Olsen log price index of $124 is $1 above the two-year average, $2 above the three year-average and equal to the five-year average.<\/p>\n
There was a slower than usual resumption of harvest activity after the New Year holiday period in New Zealand. Many harvest crews had a longer break than normal and forest owners were not setting high setting production targets. Forest owners maintained sufficient harvesting to ensure log supply to domestic customers. During February, heavy rain in multiple areas as well as a cyclone in the North Island disrupted log supply.<\/p>\n
New Zealand sawmillers report very strong demand but there is concern that supply chain issues for associated building products may delay many projects. As an example, Fletcher building has confirmed Gib plasterboard, has some lead-in times of six months before delivery to a building site. Cost increases may also mean some projects are not started.<\/p>\n
New Zealand sawmills exported 10% and 44% more sawntimber to Australia and East Asia respectively in 2021 than they did in 2020. Overall, there was about 11% more sawntimber exported from New Zealand in total, so Australian sales remained the same proportionally. There was a big reduction in sawn timber sales to China, due to the real estate financial crisis. (Down 44% from 2020 sales).<\/p>\n
This reduction in sales to China compared to 2020 started in Quarter\u00a02 and progressively got worse through 2021. The inverse happened with sales to East Asia that increased progressively from Quarter 2 onward\u00a0in 2021.<\/p>\n
Despite the well-publicised financial crisis in the Chinese real estate and construction sectors they still soaked up the increased export volumes from New Zealand in 2021. Note there was no log supply to India at the end of 2021 due to changes in fumigation requirements. Over the year, log supply to India was down 70% on 2020 supply.<\/p>","protected":false},"excerpt":{"rendered":"
The At Wharf Gate (AWG) prices for New Zealand exported logs increased an average of $7 in January and $27 in February. The large AWG price increase in February was due to a combination of increased sale prices in China, … Continue reading