New Zealand Log Prices March 2012Export log prices have eased again this month, $3-$5 across all grades, as expected. At least this time the price easing was predicted last month so most would be prepared for it, and most are expecting another lowering of the price next month. The writing has been on the wall for the past couple of months that this would happen. The price shift was needed to better align volumes with market sentiment, a small adjustment. However, adding to the pain is that shipping rates are on the way up and the NZ dollar won’t budge against the US.There is some glimpse of hope on the horizon with PNW exports expected to reduce through this year and domestic demand, while still quiet, is seeing some demand finally coming from the Christchurch rebuild. The CFR log price in China is still under downward pressure due to very large port inventories, 4 million + m³ equating to some 70-80 day’s supply at current off-take levels. This is causing Chinese customers to be less aggressive around volume and price than they have been in 2010/11 due to the high levels of inventory. Forecasts of lower GDP growth, in China, at some 7.5% versus 9-10% levels in 2010/11 have unsettled some market commentators. The Chinese market needs less wood and/or higher levels of consumption – and hopes are that consumption will continue to increase post Lunar New Year and that lower levels of log supply ex the USA and lumber exports ex-Canada will provide a correction over the next 2-3 months. There is still demand from China for NZ logs. Overall NZ log export prices have eased slightly in March, while domestic log prices have gained a little on the previous month. The Agrifax log price indicator went a little lower again this month as overall log prices, export and domestic, went down or remained very flat. Export log prices lost US$3-5/JASm³ for in-market prices. This was expected the month before and it is predicted by most involved in the industry that prices will follow a similar drop next month. This is mostly due to subdued activity in China seeing buyers unwilling to pay higher prices. There is still demand for logs, just not at a higher price. Once inventory levels get down in China there could be an improvement in prices. However, while there are still logs going into China inventories will remain steady. North Island
|
Copyright 2004-2026 © Innovatek Ltd. All rights reserved. |
