New Zealand Log Prices - September 2012

In-market log prices have raised 2-3% in the past month to be equal or higher to their highest levels this year. This reflects good demand for New Zealand sawlogs in China. With shipping prices continuing to fall, conditions are very good for log exports. The NZD/USD exchange rate has risen in the past week which will erode future gains in the in-market prices. This however has been lower for most of the past month.

Log inventories are currently working at low levels in China as a result of PNW logs being drawn to the more favourable markets in the US. The inventories are however being propped up by large amounts of domestic supply and Russian imports. This is leading to better in-market prices for New Zealand Radiata logs as slight constraints on supply combine with China moving in to busier construction months.

In-market log prices have been trading in a tight band this year. KS and KI grades have only varied by 5% during the year. This is very low compared to 2011 when prices varied by up to 27% during the year. No great movements are expected in these prices in the remainder of this year as demand looks to remain steady from China.

North Island

Domestic: Most grades are up
Export: Pruned grades are up, others are down

South Island

Domestic: Grades are mainly steady
Export: Grades are mainly steady

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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