Woodchip price in Australia still strong

Key points:

  • The woodchip price in Australia has reached a record $US182/bdmt (AU$260)
  • Demand from China now exceeds Japan
  • The woodchip price is up, but export demand for logs is on the slide

    Australia’s largest processor and exporter of woodfibre, Midway Limited, which has recently acquired a logging and haul business in Western Australia, expects demand will continue to grow and has been steadily investing in forestry projects around the nation, including in the Tiwi Islands in the Northern Territory.
    Midway’s managing director Tony Price said it was a good time to be in woodchips. “Over the last couple of years we’ve enjoyed a couple of significant price increases, with the current price for Tasmanian blue gum (woodchip) in the order of US$182 (AU$260) per bone-dry tonne and that’s the highest it’s ever been,” Mr Price said.
    “Not so long ago we were down around US$150 (per bone-dry tonne) when there was a glut of blue gum on the market, which largely came about due to the MIS (Managed Investment Scheme) era. There was lower demand and a glut in the market which drove the price down, but in the last two years we’ve seen some significant price increases.”
    Mr Price said demand from China had now exceeded Japan, and some mills in Indonesia were emerging as valued customers as well. Mr Price said Tasmanian blue gum remained the premium woodchip in the market, but lesser-quality timber chips such as acacia mangium had all increased in price this year.
    He expected the woodchip price would experience some “short-term softening” in the coming months, but overall the industry expected ongoing “modest price increases” over the next few years.
    “There’s been plenty of ups and downs over the years, and post the global financial crisis for about five years it was pretty tough,” he said. “So we have enjoyed a resurgence in the last few years and I’m very positive about the industry as it currently sits and where it’s heading in the future.”
    Source: ABC News