Tag Archives: log market

Log Market

NZ Log Market – July

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Log Market Summary

July’s At-Wharf-Gate (AWG) prices for logs delivered to ports around New Zealand are relatively unchanged from June prices. However, some exporters have strategically changed some prices of various grades and lengths, but the overall average price remains unchanged. There has been the usual seasonal slow-down in log demand as the weather heats up in China and log stocks have recently risen by an average of 50,000 m3 per week to a current level of 3.7Mm3. Some log exporters are concerned the falling stock market and the weakening Chinese currency is denting confidence in the Chinese construction industry, but other log exporters are not so pessimistic on the Chinese log market.

The domestic market is still relatively flat for structural sawn timber and there are a few mills around the country reducing production slightly by undertaking maintenance etc. Sales of clear-wood timber are still relatively strong, with stable domestic demand and very strong demand from export markets.

The PF Olsen Log Price Index remained at $132 for July. While prices for pruned logs decreased in a couple of regions around the country, this was balanced by an increase in sale prices for structural logs, as well as pulp logs in the CNI. The index is currently $11 above the three-year average.

Domestic Log Market
Pruned

Mills report that their markets are the same as last month with good demand for clear-wood sawn timber. Domestic demand has been steady and export markets have been very stable with increasing demand due to strong construction figures in both Europe and the USA. Some mills are actually oversupplied with pruned logs and are having to limit log supply, as many forest managers have scheduled winter harvesting in the flatter blocks with easier access that tend to be pruned.

Non-pruned

The domestic demand for structural timber is still flat. Actual housing starts in New Zealand seem to be about 20% behind consents granted. Market commentators aren’t too sure of the reason(s) why this is the case. Many mills in NZ aren’t “busting a gut” with production and some are taking extra days off for worker rotation and maintenance etc.

Overseas, the prices for lumber in Maine, USA have doubled in the last six months. The US construction industry has rebounded with pent up demand for new houses and renovations after the recession and rebuilds and renovations required after recent hurricanes and other weather events that require. This surge in demand has coincided with a restricted supply of lumber. This restricted supply is caused by a combination of some significant forest fires in western Canada last year that caused some mills to close for two months, the trade dispute between the United States and Canada, and a shortage of railcars and trucks to move the product.

The European Organisation of the Sawmill Industry (EOS) held its Summer General Assembly in Oslo in June. Their softwood sawn-wood markets were in general described as ‘rosy’ due to healthy construction in Europe and lively demand from importers with the two main markets being the US and China. Collectively their main concerns were around log supply (Sound similar to NZ?). This lack of raw supply is even more pronounced for hardwood mills as hardwood logs are exported to China. (As an example, in 2013 the EU exported 200,000m3 of oak logs to China, and in 2017 exported 600,000m3). These factors indicate there is unlikely to be any significant increase in production and export to countries to which NZ sawmills export sawn timber. European sawmills actually see a window of opportunity to supply the US.

Exporters of NZ sawn timber have not yet seen any reduction in demand from China due to the weakening of the Chinese Yuan (CNY). The chart below shows the deprecation of the CNY against the YSD over the last month.

Report: Scott Downs Business Development Manager PF OLSEN

https://nz.pfolsen.com/market-info-news/wood-matters/2018/july/log-market-july/

Eastland Port

Small NZ port supplying world’s biggest timber importer | 7 Nov 2017

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Pine trees moving across Gisborne’s port meet an astonishing six percent of China’s total international demand for soft wood, says Eastland Port General Manager Andrew Gaddum. The January to June 2017 figures extracted from online industry newsletter WoodWeek reiterate what a significant player this region is in a global business, worth billions.

“Six percent may not sound like much but when you consider that the Chinese soft wood log market was worth a staggering $US2.2 billion for the first half of this year, then that’s monumental,” says Eastland Port General Manager Andrew Gaddum.

China is the world’s biggest importer of timber. Nearly a quarter (24%) of China’s soft wood comes from New Zealand, with Russia the second biggest supplier at 23%. Figures from the report show that of the 6.2 million cubic metres of soft wood (Pinus radiata) that left New Zealand for China in the first half of this year, 17.5% or 1,080291 cubic metres came out of Gisborne over the same period.

“Every time you see a log it’s phenomenal to consider it’s going across the wharves of a pint-sized port at the bottom of the world and making a big dent in wood supply for the world’s biggest consumers. And because of that international demand, thousands of this region’s families are benefiting.”

Mr Gaddum says the industry’s attention to sustainable forest harvesting means there’s a continuing cycle of planting and growth, known as rotation. “Certainly, everyone is working towards sustainability in this industry for a long time yet.”

As further evidence of local industry strength Eastland Port recorded a solid September for log throughput, and a significant milestone. “Overnight, on 21 September, we handled the 2 millionth tonne of wood for this calendar year. We’ve reached that 2 million tonne mark six weeks ahead of last year,” says Mr Gaddum.

This September, 225,274 tonnes of wood was loaded onto 10 log vessels. It would have been more had bad weather not trapped two ships at Port of Tauranga as the month clicked over to October. As part of its twin berth development plans Eastland Port submitted its first resource consent application (to rebuild wharf 6 and 7, and reshape the slipway) to Gisborne District Council this month.

Source: Eastland Port