Softwood sawn timber imports into Australia drop 23%URS has just released the March quarter 2012 edition of the Australian Timber Market Survey (TMS) report. The TMS reports on timber price movements collected through a quarterly survey of the buying price of timber products by timber wholesalers and merchants in eastern Australia.
The weak conditions in the Australian housing market continued over the March quarter 2012. New dwelling construction approvals fell by approximately 0.9% over the quarter, to be around 14.7% lower
over the 12 months to March 2012. Any influence of lower interest rates on new dwelling approvals are not yet apparent and may not be realised until the second half of 2012. The number of finance approvals for dwelling construction increased by around 4.6% over the March quarter, indicating some potential for an improvement in the housing market later in the year.
Imports of softwood sawn timber, which had previously remained at relatively high levels during the housing downturn, fell by around 23.0% over the quarter to approximately 120,000 cubic metres. This fall in imports occurred while the AUD remained strong against the USD, which indicates softening demand for structural timber products. The quarterly decline in softwood timber imports was derived from a large fall in European (-45%) and New Zealand (-17%) imports. Imports of plywood and veneer remain at high levels, despite a fall by around 6.1% over the quarter. Chile, New Zealand and China were the most significant sources of imported plywood and veneer over the March quarter.
Declining structural timber prices have coincided with the downturn in housing construction activity. Softwood structural MGP10 and MGP12 timber products experienced price falls over the March quarter, which ranged from around 0.7% to 3.9%. Softwood price trends for structural and outdoor products have diverged over the last 18 to 24 months, with outdoor product prices remaining stronger than structural prices during the downturn in the housing construction market. Prices for outdoor softwood timber products remained flat over the quarter.
Price movements for plywood products were relatively flat and prices for LVL engineered wood products fell by around 1.2% to 1.3%. Weaker prices for plywood and LVL products are likely related to competition from cheaper imports, as plywood imports remained at high levels over the March quarter 2012. TMS participants mentioned the high level of competition from cheaper imports of timber products, which has been placing downward pressure on prices for domestically produced products.
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