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Log harvest volumes in New Zealand are being cut back sharply as both export and domestic demand soften. Prices are falling. Even with cyclone-related closure of some local mills, sawn timber inventories are rising and more cutbacks are coming.<\/p>\n
Chinese log buyers continue to struggle with credit issues and log demand in New Zealand is reducing as construction activity declines due to high inflation and interest costs. AWG (At Wharf Gate) prices dropped 5-10 NZD per JASm3 with the larger drops at South Island ports. Some NZ mills and forest owners have already pre-empted Quarter 3 pricing and reduced prices for domestic logs to preserve supply chains. There is general agreement New Zealand at the bottom of this export price cycle, but few are bold enough to make predictions about the rate of recovery. Harvest volumes are reducing significantly in New Zealand which will help with the supply\/demand balance.<\/p>\n
The June PF Olsen Log Price Index decreased $5 to $103. The index is the lowest since March 2020 when markets were impacted by COVID-19 lockdowns. The index is currently $12 below the two-year average and $15 below the five-year average.<\/p>\n
Domestic Log Market<\/strong><\/p>\n There is strong demand and enquiries for clearwood timber from Europe and the USA. There has been reduced supply of clear boards with Pan Pac Forest Product\u2019s Whirinaki mill in Napier being inoperable since Cyclone Gabrielle in February. Sales of the mid to lower grades produced by these mills cutting pruned logs are more of a challenge. There are high stocks of premium decking around New Zealand, and timber prices in Asia are falling although lower prices are offset partially by lower freight costs.<\/p>\n Production of structural timber is well ahead of sales with mills now looking at difficult decisions on how to reduce timber production. Australia is also not a lucrative market as they can buy cheaper product from the Baltic countries.<\/p>\n China softwood log inventory has increased slightly to about 4m m3 with radiata accounting for about 3.15 m3. Port off-take has remained steady ranging round 70-75k m3 per day. Supply volume from New Zealand will drop significantly over the next couple of months as many forest owners in New Zealand have stopped or slowed down harvest operations. Many ports in New Zealand have now restricted log deliveries to four days a week, as there is insufficient supply to justify remaining open all week. As predicted last month, there hasn\u2019t yet been any log imports from Australia.<\/p>\n The CFR price for A grade radiata logs in China has bottomed at 105 USD per JASm3, and log exporters are currently offering sales at 110 USD for A grade. Domestic wholesale log prices in China have now stabilised.<\/p>","protected":false},"excerpt":{"rendered":" Log harvest volumes in New Zealand are being cut back sharply as both export and domestic demand soften. Prices are falling. Even with cyclone-related closure of some local mills, sawn timber inventories are rising and more cutbacks are coming. Chinese … Continue reading