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New Zealand's export log prices have experienced a significant decline, reaching their lowest point since July last year. There was a decrease of an average of $22 per JASm3 at Wharf Gate (AWG) prices for export logs in May after decline $20-25 per JASm3 in April.<\/span><\/p>\n The drop in prices can be attributed to several factors. The CFR log sale price in China for New Zealand pine A grade has plummeted to a range of 108-115 USD per JAS m3. While softwood inventory and log demand in China have remained stable, the anticipated increase in construction activity has not materialized. Furthermore, as China enters its hotter months of June to August, a period traditionally associated with reduced construction activity, the likelihood of a significant increase in the near future is diminishing. The average price for logs imported to China gained 4% In April.<\/p>\n The May PF Olsen Log Price Index reflects this downward trend, declining by $11 to $113. This marks the lowest level for the index since July last year. It is currently $9 below the two-year average and $10 below the five-year average, indicating a challenging market for export logs.<\/p>\n In the domestic log market, the demand has decreased, leading many mills to reduce their log orders. Prices have remained stable for Quarter 2, but the local structural market is facing an oversupply issue. During the Covid lockdowns, DIY projects such as building decks and home improvements saw a surge, resulting in reduced discretionary spending by households. Additionally, new build starts have slowed, and logistical warehousing builds, although ongoing, have reduced timber input compared to dwellings.<\/p>\n China, one of New Zealand's major export destinations, has witnessed a drop in softwood log inventory, reaching approximately 3 million m3, with radiata accounting for about 2.75 million m3. However, port off-take has remained steady at around 70,000 m3 per day. Despite the usual decline of construction activity during the hotter months, industry commentators expect a less significant drop this year due to the already lower but consistent construction levels. Moreover, low inventory levels throughout the supply chain are likely to prevent a sharp decline in daily port off-take.<\/p>","protected":false},"excerpt":{"rendered":" New Zealand’s export log prices have experienced a significant decline, reaching their lowest point since July last year. There was a decrease of an average of $22 per JASm3 at Wharf Gate (AWG) prices for export logs in May after … Continue reading