Weak housing market leads softwood prices downwards
In the June quarter 2012, the price of MGP10 and MGP12 was reported to have fallen by 1-2%. Lowered detached house construction contributed to the decline in structural softwood timber prices. Construction of detached houses fell by 5.6% in the June quarter 2012, continuing the challenging demand conditions faced by timber producers and forest growers over the past 18 months.
The engineered softwood products, LVL and I-joists/beams declined broadly in line with the softwood MGP grades this quarter reflecting the popular use of these products in high-load house construction applications such as for floor joists, lintels and bearers.
Weakened demand conditions in the June quarter also contributed to a decline in the volume of softwood timber imported with volumes decreasing by 4% respectively, despite the high Australian dollar and relatively low international freight costs.
In contrast to softwood structural products, the price of treated softwood decking timber and sleepers increased during the June quarter. Prices reported by the TMS for treated pine sleepers in particular have remained robust over the past 12 months with a reported 3.8% increase in prices over the past 12 months despite the challenging conditions in the housing market. This reflects the relatively stable and generally less capital-intensive markets for renovations and landscaping work and the increased popularity of treated pine as a product for outdoor and landscaping work.
Prices for hardwood timber products generally showed positive movements in the June quarter 2012 with the price of the structural grades F17 and F27 increasing by 1% and 2% and the price of Australian flooring products such as Victorian ash, blackbutt and spotted gum also increasing by between 3% and 5% on average.
Prices for plywood increased by 1.5-2% in the June quarter 2012 while the prices of MDF and particleboard remained relatively flat with only slight movements reported. For more information, a copy of the Timber Market Survey report is available for download from the URS Asia-Pacific website at www.ap.urscorp.com
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