New Zealand\u2019s export log market is beginning to stabilise after three difficult years, with the downturn in 2026 proving milder than the corrections recorded in previous seasons.<\/p>\n
The current price trough is estimated at around 5% below the trailing 12-month average. This compares with declines of about 8% in 2025, 10% in 2024 and 25% in 2023, when export returns fell sharply under pressure from weak Chinese demand, high freight costs and currency movements.<\/p>\n
At-wharf-gate prices for A-grade short logs recovered into the low NZ$120s per JAS by July. The improvement followed a weaker June, when spot prices lost around NZ$8\/JAS due to higher shipping costs, exchange-rate volatility and softer sentiment among Chinese buyers.<\/p>\n
Benchmark pricing also moved lower in June, falling by NZ$3 to NZ$119\/JAS. Even after the decline, the index remained close to its five-year average.<\/p>\n
Freight, currency and Chinese prices move in exporters\u2019 favour<\/strong><\/p>\n The improvement in market conditions has been supported by a simultaneous change in the three factors that weighed most heavily on returns during June.<\/p>\n Freight costs are expected to decline from the mid-US$40s to the high US$30s per unit during the second half of July. The New Zealand dollar has also weakened to a seven-month low of around US$0.56, improving returns for exporters selling in US dollars.<\/p>\n At the same time, CFR log prices in China have begun to recover.<\/p>\n The sharp deterioration expected by some market participants at the end of the second quarter has therefore not materialised. Export returns have instead steadied, while lower shipping costs and the first signs of a seasonal improvement in Asian demand have offered some support to prices.<\/p>\n Log inventories at Chinese ports have remained broadly stable, while daily consumption has started to increase as the wet season comes to an end.<\/p>\n China remains central to the market outlook<\/strong><\/p>\n The strength of the recovery will depend largely on whether China\u2019s construction season gains momentum during August and September.<\/p>\n Daily log consumption is currently estimated in the low-to-mid 50,000 m\u00b3 range. Market expectations suggest that volumes could rise above 60,000 m\u00b3 per day by late August.<\/p>\n Chinese port inventories are estimated at around 2.5 million m\u00b3. At this level, stocks are considered manageable and do not indicate a heavily oversupplied market.<\/p>\n New Zealand remains highly exposed to Chinese demand. Forestry export revenue reached NZ$6.28 billion in 2025, with China accounting for approximately 55% of the total. Logs and poles generated around NZ$3.4 billion.<\/p>\n New Zealand is also China\u2019s largest individual supplier of imported softwood logs, accounting for an estimated 70\u201380% of total import volumes.<\/p>\n This position gives New Zealand exporters a large share of the market but limited control over pricing. Chinese domestic construction activity and local log prices continue to determine how far imported prices can rise. A reduction in New Zealand supply can support the market, but only within the price range Chinese buyers are prepared to accept.<\/p>\n Lower salvage volumes tighten New Zealand supply<\/strong><\/p>\n The more lasting support for export prices is likely to come from the supply side.<\/p>\n Large volumes of storm-damaged timber from the upper South Island and lower North Island had previously entered the market as salvage wood. These logs were often harvested and sold quickly, with forest owners prioritising recovery before the timber deteriorated rather than waiting for stronger prices.<\/p>\n That additional supply is now declining.<\/p>\n Salvage harvesting in the lower North Island is largely approaching completion. A similar pattern was previously seen around Taupo, where log production declined sharply once the available storm-damaged timber had been removed.<\/p>\n Unlike normal harvesting, storm salvage does not provide a continuing source of supply. The affected forests cannot be harvested again for several decades. With no comparable concentration of mature forests expected to replace these volumes immediately, New Zealand log supply is likely to contract gradually.<\/p>\n This reduction could improve market balance over time, particularly if Chinese consumption remains stable or begins to increase.<\/p>\n India takes a larger share of New Zealand shipments<\/strong><\/p>\n Exporters are also making further progress in diversifying sales beyond China.<\/p>\n Around 12 vessels were reportedly scheduled to sail from New Zealand to India in July. CFR prices in the Indian market were estimated at more than US$160\/m\u00b3, compared with approximately US$124\/m\u00b3 in China.<\/p>\n Freight costs to India are higher, but the wider price difference can still result in a better net return for exporters.<\/p>\n India remains a much smaller destination than China, but stronger shipment activity is giving New Zealand suppliers an additional outlet at a time when Chinese demand remains difficult to predict.<\/p>\n The domestic market is also showing some improvement. New Zealand residential building consents increased by 19% in the year to May, ending a three-year decline and offering some support to local timber consumption.<\/p>\n Forestry export revenue expected to decline slightly<\/strong><\/p>\n Official forecasts remain cautious despite the recent improvement in log prices.<\/p>\n New Zealand forestry export revenue is projected to decline by around 1% to NZ$6.1 billion this year. A further decrease of approximately 2% is expected in 2026\u201327.<\/p>\n The market is therefore moving towards greater stability rather than a strong price recovery. Freight costs, currency movements and Chinese demand remain capable of changing export returns quickly.<\/p>\n For logging contractors, transport companies, ports and lenders in forestry-dependent regions, even a moderate and sustained improvement in log prices would provide some relief after several years of volatility.<\/p>\n The third quarter could mark a turning point for the New Zealand export log market, but the recovery remains dependent on stronger Chinese consumption, lower freight costs and the absence of further disruption to global trade.<\/p>\n New Zealand\u2019s export log market is beginning to stabilise after three difficult years, with the downturn in 2026 proving milder than the corrections recorded in previous seasons. The current price trough is estimated at around 5% below the trailing 12-month … Continue reading \n\n
\n \nIndicator<\/th>\n Current<\/th>\n Trend<\/th>\n<\/tr>\n<\/thead>\n \n A-grade AWG price<\/td>\n Low NZ$120s\/JAS<\/td>\n \u25b2 Recovering<\/td>\n<\/tr>\n \n Benchmark index<\/td>\n NZ$119\/JAS<\/td>\n Near 5-year average<\/td>\n<\/tr>\n \n China CFR price<\/td>\n Around US$124\/m\u00b3<\/td>\n \u25b2 Improving<\/td>\n<\/tr>\n \n India CFR price<\/td>\n Above US$160\/m\u00b3<\/td>\n Strong<\/td>\n<\/tr>\n \n Chinese port inventories<\/td>\n ~2.5 million m\u00b3<\/td>\n Stable<\/td>\n<\/tr>\n \n Chinese daily consumption<\/td>\n 50,000\u201355,000 m\u00b3\/day<\/td>\n Expected to exceed 60,000 m\u00b3\/day<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>","protected":false},"excerpt":{"rendered":"