New Zealand Log Prices - May 2012

In market prices for logs have this month regained some of the losses seen over the past couple of months, and are expected to gain a little more before the end of May. However, going into June there could be some settling of prices as the ‘hot’ season arrives in China and demand eases.

Inventory levels in China now are estimated to be around 2.6 million cubic metres, or 60 days’ supply at current off-take levels. This is well down from the 3 million cubic metre level that’s seen as a tipping point for prices to dip. This inventory level is keeping the market in China stable for now. Demand from India is firm now and as a result is attracting additional supply, but this will soon tapper off with the expected arrival of the monsoon in June.

The Agrifax Log Price Indicator was up slightly in May, mostly coming from a lift in some export grade log prices. The spread between North and South Island prices is slowly narrowing. With the lower value of the New Zealand dollar combined with lower inventories in China there is real potential for a steady few months ahead in export log markets. There is also some news of an improved market for domestic logs and lumber, but still no real demand coming from a rebuild in Christchurch.

North Island
  • Domestic: Grades are down $1/t to NZ$5/t.
  • Export: Grades are down NZ$3/t to NZ$5/t.
South Island
  • Domestic: Grades are down $1/t to NZ$5/t.
  • Export: Grades are down NZ$1/t to NZ$5/t.
For more detailed reports contact NZX Agrifax at www.nzxagri.com/agrifax

The Agrifax log price data is a weighted average of prices collected each month from a range of New Zealand log buyers and sellers. Log prices shown in the table will vary regionally and by supplier and should only be used to provide a broad trend of log price movements.
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